Abstract
•The impact of export product diversification on energy efficiency is examined.•The empirical evidences confirm that export product diversification helps to mitigate the energy intensity in OECD countries.•Extensive and intensive margins of exports contribute to decrease energy and carbon intensity.•Urbanization is highlighted as contributor for reducing energy efficiency.•Trade openness and financial development tends to have negative impacts on energy intensity.
The present study explores the important contributors of energy efficiency in OECD countries, by taking the energy intensity and carbon intensity as a proxy of energy efficiency. Notably, we study the role of three indicators of export diversification (export product diversification, extensive margin and intensive margin) for energy intensity and carbon intensity in 29 OECD countries, which further allow us to draw new and innovative conclusions. In doing so, we use the data from 1990 to 2015 and employ alternative panel data estimations; sequential estimation, panel quantile regressions, system GMM and difference GMM, for an in-depth and detailed empirical analysis. In our empirical analysis, we robust check the impacts of export diversification on carbon intensity and investigate the role of institutional factors for energy intensity. The empirical outcomes provide robust evidence that all three indicators of export diversification help to reduce energy intensity and might be used as a policy factor in improving energy efficiency and sustainable environment. The empirical evidence further reports practical implications for policymakers and environmental scientists to achieve the greener growth, energy efficiency and sustainable development goals (SDG's) of OECD countries.