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:: Volume 25, Number 81 (quartery journal of Economic Research and Policies 2017) ::
3 2017, 25(81): 311-344 Back to browse issues page
09 The Effect of Oil Price and Technical Progress on Oil Demand: Energy-intensive Manufacturing Industries in European Importer of Iranian Oil
somayeh azami *, saba lobabi mirghavami2
assistant professor Razi university, Razi University, Faculty of Social Sciences and Education, Department of Economics, Kermanshah, Iran , sazami_econ@yahoo.com
2- Islamic Azad University of Tehran - Science and Research Branch
Abstract:   (258 Views)

By focusing on two major drivers of oil demand – i.e. oil price and technical progress – this article presents a thorough behavior analysis of energy-intensive manufacturing industries’ oil demand in European countries, which imported Iranian oil during 1980-2010. The growth accounting method and estimating parametric cost function are employed as analysis tools and the significance level of converted parameters are investigated with using Delta technique. The results show that studied industries have experienced technical progress during the examination period which resulted in reduced oil demand. It is expected that oil demand experiences the significant decrease in response to rising oil prices. Oil price and technical progress have positive impacts on average oil productivity (and thereby decreasing demand for oil). Furthermore, estimation of cross price elasticity indicates that rising oil prices lead to reduce oil demand and raw material and capital replace oil. In the studied industries, reduced oil demand as a result of rising oil prices (through between factor substitution and oil efficiency)and technical progress implies the restriction of Iran's oil revenues, as well as officials and policy makers, focus on the development of oil products, petrochemicals, electricity, and natural-gas export.

Keywords: Energy-intensive industries, European industries, Oil demand, Technical progress and oil price.
Full-Text [PDF 1120 kb]   (155 Downloads)    
Type of Study: Research | Subject: Special
Received: 2017/01/9 | Accepted: 2017/07/12 | Published: 2017/07/12
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azami S, lobabi mirghavami S. 09 The Effect of Oil Price and Technical Progress on Oil Demand: Energy-intensive Manufacturing Industries in European Importer of Iranian Oil . 3. 2017; 25 (81) :311-344
URL: http://qjerp.ir/article-1-1675-en.html
Volume 25, Number 81 (quartery journal of Economic Research and Policies 2017) Back to browse issues page
فصلنامه پژوهشها و سیاستهای اقتصادی Journal of Economic Research and Policies
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