Analysis of the relationship between energy intensity and economic development levels: A study on BRICS-T countries

The main objective of this study is to empirically examine the relationship between energy intensity and economic development. For that purpose, a data set of BRICS-T countries between the period 1990-2012 is used. In this study, unlike other studies in the litearature same period data have been analyzed by two different methods. The relationship between energy intensity, income per capita, foreign direct investment and industrial energy consumption ratio have investigated by cointegration method. And then between energy intensity and income per capita have investigated by another method which is known Panel Smooth Transiction Regression (PSTR) model. The existence of cointegration relation between series was examined through Westerlund Durbin Hausman Test; and it was confirmed that there was cointegration relation between series. Long-term cointegration coefficient of cointegrated model was estimated through estimation method based on the Common Correlated Effect developed by Pesaran (2006). Results of both two method shown that the inverted-U shape curve relation between per-capita income and energy intensity is confirmed on BRICS-T countries. Keywords Energy Intensity, Economic Development, Panel Smooth Transiction Regression (PSTR), Westerlund (2008) Durbin Hausman Test