The effect of financial development and value added on energy consumption in Iran's agriculture and industury sectors

Document Type : Research Article

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Abstract

This paper examines the impact of financial development and value added on energy consumption in Iran's agriculture and industry sectors , over the period of 1976-2013 by using BAND ARDL, Based on unrestricted error correction model (UECM), (Pesaran, shin and Smith, 2001). In this study was used ratio of credits allocated to agriculture and industry sectors as indicator of financial development. The finding of BAND ARDL are confirming long run relationship among variables and show ,in both sector, financial development and value added growth increase energy consumption. Financial development growth by 1 percent increase energy consumption in industry and agriculture sectors respectively in the 0.05 and 0,025 percent and a 1% increasing in the value added increase energy consumption by as much as 0.31 and 0.62 percent in the aforementioned sectors. Also,the results showed the negative impact of urbanization and liberalization on the energy consumption in agriculture sector and the positive impact of urbanization on the energy consumption in industry sector.

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Journal of Applied Economics Studies in Iran
Volume 5, Issue 19
November 2016
Pages 269-286

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