Abstract
Given the significance of energy conservation as a prime objective of environmental sustainability, countries all around the world are keen to identify significant factors that lead to the augmentation of energy utilization. Considering the rising emphasis of economies in utilizing natural resources to attain higher levels of globalization, the current research was aimed at investigating how the returns of natural resources and globalization affect energy consumption in top Asian economies. In doing so, the study emphasized the nonlinear relationship among the variables and applied the novel nonparametric method of causality in quantile to identify the quantile-based causal connection of natural resources and globalization on the returns and volatility of energy utilization in selected Asian countries. Moreover, the presence of nonlinearity in the variables was tested by the Brock- Dechert-Scheinkman test (BDS test), which confirmed that all variables showed nonlinear behavior. Furthermore, the findings of quantile cointegration confirmed a nonlinear long-run relationship of natural resources and globalization with energy utilization. The prime findings of causality in quantile revealed that the returns of natural resources and globalization had a significant causal effect on the returns of energy consumption in all countries. On the other hand, the volatility in energy consumption concluded no causal association with the returns of natural resources and globalization in any of the studied Asian countries. The findings are beneficial for the policymakers to formulate policies that will help to reduce the level of energy consumption.
Highlights
Natural resources are the resources that are bestowed on a country by nature, without any particular investment by the country, and they are considered one of the most influential determinants of the economic development of a country [1,2,3,4,5].most of the investments of resource-abundant countries are normally focused on extraction, which itself is a huge and critical area for natural scientists, environmental economists, Energies 2020, 13, 2273; doi:10.3390/en13092273 www.mdpi.com/journal/energiesEnergies 2020, 13, 2273 and practitioners [6]
Resource-abundant countries fall into two categories: (1) Richly endowed, where countries transform their operations for the advancement of the capacity and capability of various industries and direct the extraction of the natural resources towards the betterment of the economic development and financial health of the country [7]. (2) Narrowly focused, where countries make themselves and their respective economies more dependent on the natural resources by focusing most of the industries in the same field increasing the level of dependency on the presence of the natural resources [8,9,10]
The current research aimed to investigate the causal effect of natural resources and globalization on the returns and volatility of the utilization of energy in top Asian economies
Summary
Natural resources are the resources that are bestowed on a country by nature, without any particular investment by the country, and they are considered one of the most influential determinants of the economic development of a country [1,2,3,4,5].most of the investments of resource-abundant countries are normally focused on extraction, which itself is a huge and critical area for natural scientists, environmental economists, Energies 2020, 13, 2273; doi:10.3390/en13092273 www.mdpi.com/journal/energiesEnergies 2020, 13, 2273 and practitioners [6]. Resource-abundant countries fall into two categories: (1) Richly endowed, where countries transform their operations for the advancement of the capacity and capability of various industries and direct the extraction of the natural resources towards the betterment of the economic development and financial health of the country [7]. Natural resources enable direct foreign investment to a country, and that has a tendency to improve the standard of living of the locals [11,12], it adversely affects the potential growth of the country in the long term [13], making the host country intensely dependent on the consumption and extraction of the natural resources; this is referred to as a resource curse [14,15,16,17,18]. Researchers suggest that by improving institutional quality, having a good incentive program to the personnel engaged in the respective activities [22], and strengthening the political stability [23], the country can counter the phenomenon of being trapping in a resource curse
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