International energy network policies & exonomic growth in Korea

Abstract

This paper analyzes dynamic causality between international energy network policies in the petroleum industry and economic growth in Korea. We first employ unit root tests, cointegration ARDL bounds test. We then use a vector error correction model (VECM) causality tests to determine this econometric relationship using data for the period 1980-2003. The ARDL bounds test reveals the existence of a cointegrating relationship between international energy network policies and economic growth in Korea. The findings of the causality test employed using a VECM indicates short-run causality does not exist between them, but there is a unidirectional long-run causality from the network to the economic growth variable. Overall, the results suggest that international energy network policy implementation would be desirable for long-run economic growth in Korea. © Serials Publications Pvt. Ltd.