ABSTRACT
3. Data
exports
or real imports ), is the error correction term, and is the random error term. The VECM is estimated using a seemingly unrelated regression (SUR) technique that allow for cross-sectional specific coefficient vectors and cross-sectional correlations in the residuals.and from the World Bank (2013) dataset. Data on the exports and imports of Taiwan are from the National Statistics, Republic of China database and converted to constant 2005 US dollars.
Time series plots of the natural logs of energy consumption for each of the countries are shown in Fig. 1. Energy consumption has been increasing over time, although the strength of this trend varies by country. In the case of Japan, energy consumption has been fluctuating since 2000, showing a reduction trend in recent years. China is the biggest energy consumer, followed by Japan. Energy consumption in China, Korea, and Taiwan has increased steadily over time whereas that in Singapore and Hong Kong has been fluctuating since the mid-1990s. Fig. 2 shows time series plots of natural logs of the real GDP for each country, and overall, GDP has been increasing over time. In the case of Hong Kong, Japan, Korea, and Singapore, the GDPs dropped temporarily in the mid-1990s because of the Asian financial crisis and once again temporarily at the end of the 2000s by the global financial crisis.
However, overall GDP has shown an increasing trend. In the case of Japan, GDP growth has slowed rapidly since 1990.
The time series plots of the natural logs of real exports for each country are shown in Fig. 3. Despite that the exports may have been reduced temporarily by foreign economic conditions, the trends have been generally upward sloping.
China is the largest exporter, followed by Japan and Korea. Fig. 4 shows time series plots of the natural logs of the real imports of the countries. Exports and imports show a similar pattern, but import fluctuates more than exports do;
furthermore, they are highly correlated, with a correlation coefficient of 0.98.
China is the largest importer, followed by Japan and Korea.
Table 1 shows the average annual growth rates of each variable from 1980 to 2010. The average growth rates of energy consumption vary among the
countries, ranging from a low of 1.2 (Japan) to a high of 6.4 (Singapore).
Except for China, energy consumption and GDP growth rates show similar trends, but the GDP growth rate was generally higher than the energy consumption growth rate. In China, despite a high GDP growth rate (in the 10% range), the energy consumption growth rate was only 4.8%. In most countries, exports and imports have been growing much faster than GDP or energy consumption. In China, Hong Kong, and South Korea, the average annual growth rates in both imports and exports exceeded 10% and showed double-digit growth rates.
Tables 2 and 3 show the share of exports and imports of goods and services of each country’s GDP. The share of exports increased year over year. Since 1990, the share of exports has increased rapidly in China and Hong Kong, whereas it has increased steadily in the other countries. In 2010, the share of exports of GDP was 30.6% in China, 52.3% in South Korea, and 63.9% in Taiwan. In particular, the share of exports of GDP exceeded 200% in Hong Kong and Singapore. Except for Japan, exports as a percentage of GDP in these countries were higher than the world average of 29% and the OECD average of 26.2%. Although some differences exist between the shares of exports and imports as a portion of GDP, they show a similar pattern.
Moreover, exports of East Asian countries have an important share of the world export. As of 2010 (constant 2005 US dollars), China was the world's second largest exporter and Japan was the world's fourth largest exporter. South Korea was the world's eighth place, Hong Kong, Singapore and Taiwan, respectively tenth, eleventh and twenty-fourth places in the world ntries. These facts show that trade causes economic growth in East Asian countries.
Therefore, analyzing the causal relationship between trade (exports and imports) and energy consumption in these countries is very useful.
Table 1. Average Annual Growth Rates 1980–2010 (percent)
Country EnergyConsumption GDP Gross capital
formation Labor Exports Imports China 4.764 10.061 12.275 2.078 12.018 12.170 Hong Kong 3.707 4.909 3.836 1.503 11.670 11.485 Japan 1.228 2.160 1.005 0.477 4.843 3.824 Korea 6.194 6.304 6.434 1.883 11.845 9.733 Singapore 6.375 6.840 6.002 2.162 9.841 9.375 Taiwan 5.431 7.565 6.327 1.683 8.670 8.370
Table 2. Exports of goods and services (% of GDP)
1980 1990 2000 2010
China 10.648 16.074 23.326 30.615
Hong Kong 88.933 130.657 141.764 218.977
Japan 13.423 10.288 10.877 15.171
Korea 32.065 27.954 38.564 52.278
Singapore 202.609 177.449 192.338 203.585
Taiwan 47.016 40.822 46.423 63.878
OECD 18.108 18.159 23.607 26.158
World 19.551 19.856 26.039 29.040
Table 3. Imports of goods and services (% of GDP)
1980 1990 2000 2010
China 11.013 13.085 20.917 26.612
Hong Kong 89.450 122.119 137.355 213.547
Japan 14.372 9.379 9.429 13.976
Korea 39.965 29.029 35.707 49.703
Singapore 209.554 167.381 179.487 174.098
Taiwan 46.871 33.266 43.105 63.878
OECD 19.506 18.776 24.397 26.752
World 20.610 20.177 25.834 28.909
Table 4. Correlations for the panel data set (variables in growth rates)
1.000000 0.746315 0.339998 0.258646 0.575988 0.670054
0.746315 1.000000 0.305813 0.211243 0.324666 0.597807
0.339998 0.305813 1.000000 0.152652 0.103004 0.118231
0.258646 0.211243 0.152652 1.000000 0.151503 0.200070
0.575988 0.324666 0.103004 0.151503 1.000000 0.660501
0.670054 0.597807 0.118231 0.200070 0.660501 1.000000
Table 4 shows the correlations among the panel data growth rate variables.
Most of correlations are positive. The growth rate of energy consumption is correlated with the growth rate of GDP by 0.259, followed respectively by correlations with the growth rates of capital, imports, labor and exports. The growth rate of energy consumption is more highly correlated with the growth rate of imports than with that of exports. The growth rate of GDP is highly correlated with the growth rate of capital. One of the reasons is that countries such as Japan and Korea are exporting relatively more the capital intensive goods than any other countries. The growth rate of exports has the lowest correlation with the growth rate of labor.
Fig. 1. Natural Log of Energy Consumption
Fig. 2. Natural Log of Real Output
26.0 26.5 27.0 27.5 28.0 28.5 29.0
1980 1985 1990 1995 2000 2005 2010
_CHN
24.4 24.8 25.2 25.6 26.0 26.4
1980 1985 1990 1995 2000 2005 2010
_HKG
28.5 28.6 28.7 28.8 28.9 29.0 29.1 29.2
1980 1985 1990 1995 2000 2005 2010
_JPN
25.6 26.0 26.4 26.8 27.2 27.6 28.0
1980 1985 1990 1995 2000 2005 2010
_KOR
23.5 24.0 24.5 25.0 25.5 26.0
1980 1985 1990 1995 2000 2005 2010
_SGP
25.0 25.5 26.0 26.5 27.0
1980 1985 1990 1995 2000 2005 2010
_TAI
Fig. 3. Natural Log of Real Exports
24 25 26 27 28 29
1980 1985 1990 1995 2000 2005 2010
_CHN
23 24 25 26 27
1980 1985 1990 1995 2000 2005 2010
_HKG
25.6 26.0 26.4 26.8 27.2 27.6
1980 1985 1990 1995 2000 2005 2010
_JPN
23 24 25 26 27
1980 1985 1990 1995 2000 2005 2010
_KOR
23.5 24.0 24.5 25.0 25.5 26.0 26.5 27.0
1980 1985 1990 1995 2000 2005 2010
_SGP
23.5 24.0 24.5 25.0 25.5 26.0 26.5
1980 1985 1990 1995 2000 2005 2010
_TAI
Fig. 4. Natural Log of Real Imports
24 25 26 27 28
1980 1985 1990 1995 2000 2005 2010
_CHN
23 24 25 26 27
1980 1985 1990 1995 2000 2005 2010
_HKG
25.8 26.0 26.2 26.4 26.6 26.8 27.0 27.2
1980 1985 1990 1995 2000 2005 2010
_JPN
23.5 24.0 24.5 25.0 25.5 26.0 26.5 27.0
1980 1985 1990 1995 2000 2005 2010
_KOR
23.5 24.0 24.5 25.0 25.5 26.0 26.5 27.0
1980 1985 1990 1995 2000 2005 2010
_SGP
23.5 24.0 24.5 25.0 25.5 26.0 26.5
1980 1985 1990 1995 2000 2005 2010
_TAI
Method
statistic prob. Statistic prob. Statistic prob. Statistic prob. Statistic prob. Statistic prob.
Null: Unit root (assumes common unit root process)
Levin, Lin &Chu t* -2.571 0.005 -6.873 0.000 -1.761 0.039 -6.141 0.000 -5.384 0.000 -4.596 0.000
Null: Unit root (assumes individual unit root process)
Im, Pesaran and Shin W-stat -1.495 0.068 -7.110 0.000 0.705 0.760 -6.166 0.000 -2.145 0.016 -6.131 0.000 ADF Fisher Chi-square 26.061 0.011 68.820 0.000 8.427 0.751 59.060 0.000 23.063 0.027 59.289 0.000 PP Fisher Chi-square 36.025 0.000 66.546 0.000 7.660 0.811 52.833 0.000 23.210 0.026 70.595 0.000