These papers will be helpful for ECONOMICS and RESEARCH students

1. ENERGY CONSUMPTION AND TRADE
OPENESS RELATION WITH ECONOMICAL
GROWTH
AMMAD KHALIL
SUPERIOR UNIVERSITY, LAHORE, PAKISTAN
EMAIL: ALISAMEER_182@YAHOO.COM
Abstract:
This paper explores the relationship between trade openness and energy
Consumption with economical growth. The relationship between trade openness and energy
consumption is inverted U-shaped in high income countries but U-shaped in middle and low income
countries as pakistan . This paper also shows the real importance of trading and the real effects of trade
on a growing economy. This paper also reveals the flaws of energy sector and how to overcome on
those flaws .Facts and figures are shown through different tables and statistical explanations. Paper also
explains the homogenous and non-homogenous causality analysis reveals the bidirectional causality
between trade openness and energy consumption. The study covers the period of 1980-2013. We have
applied panel cointegration and causality approaches for long run and causal relationship between the
variables. This study also seeks to determine the direction of causality between energy consumption
(EC) and economic growth. Trade liberalization influenced high rates of growth for the developing
countries. Openness and liberalization and integration took place in the economies of almost all the
developing countries during the late 80s and early 90s, in the previous century, on the inspiration of
international donor agencies to implement the structural adjustment programs.

2. TABLE OF CONTENTS
1. ABSTRACT
2. INTRODUCTION
2.1 HISTORY / BACKGROUND
2.2 PREVIOUS STUDIES
2.3 GAP IN PREVIOUS STUDIES
2.4 PURPOSE OF STUDY
2.5 SIGNIFICANCE OF STUDY
2.6 BENEFITS FOR VIEWERS
3. PURPOSE STATEMENT
3.1 GENERAL STORY
3.2 DEEPLY DESCRIPTION
4. OBJECTIVE OF THE STUDY
4.1 MAIN OBJECTIVE

3. 4.2 SUB OBJECTIVE
5. RESEARCH QUESTIONS
5.1 MAIN QUESTIONS
5.2 SUB QUESTIONS
6. RESEARCH HYPOTHESIS
6.1 NULL
6.2 ALTERNATIVE
7. SIGNIFICANCE OF STUDY
7.1 IMPORTANCE
7.2 NATIONAL LEVEL
7.3 INTERNATIONAL LEVEL
8. LITERATURE REVIEW
8.1 BACK GROUND
8.2 DEFINITION
8.3 INDIVIDUAL
8.4 RELATION OF VARIABLES
(1). TRADE
(2). CONSUMPTION

4. (3). TRADE AND CONSUMPTION WITH ECONOMICAL GROWTH
9. THEORETICAL FRAME WORK
9.1 DEPENDENT VARIABLE
9.2 INDEPENDENT VARIABLE
10. METHODOLOGY
10.1 SAMPLING TECHNIQUES
10.2 SAMPLE POPULATION
10.3 DATA COLLECTION TECHNIQUES
10.4 DATA ANALYSIS
10.5 RELIABILITY OF DATA
11. LIMITATION OF STUDY
11.1 WEAKNESS OF MY STUDY
12. ETHICAL CONSIDERATION
13. END LIST REFERENCES
APPENDIX
2.Introduction

5. 2.1 History/background
Fast Economics begins after the great depression of 1930. After that people come to know the importance
of economics. 7 million people starved to death in the Great Depression. After all by finding the reason
they come to conclusion and cover up . so the current situation is better than the yore but need of research
is still .our topic is about that what is the relationships, effects, of the trade sector and energy
consumption on any economy .
There are many effective ways to grow up wards in the bad economical situations for any country and in
that kind of situations an economy uses the external links to get stability and take control on energy
consumption but when we talk about stability that some things bring stability in an economy. There are
many things but trade openness is one of them that the help of trade import / export a country earn much
profit to look forward and fulfill the needs of country and got stability whom we called the situation of
equilibrium on macro level. In the yore we can easily see that how successful economies took decisions.
Trade liberalization has affected the flow of trade (goods and services) between developed and
developing countries. The Heckscher-Ohlin trade theory reveals that under free trade, developing
countries would specialize in the production of those goods that are produced by relatively
abundant factors of production such as labor and natural resources
2.2 Previous studies on this topic
Many of the researchers work on this topic .They work on this topic and get different results .there
are large numbers of researchers, students, scholars who worked on this. As,
Muhammad Shahbaz
COMSATS Institute of Information Technology, Lahore, Pakistan
Email: shahbazmohd@live.com
Samia Nasreen
Government College University Faisalabad, Faisalabad, Pakistan
Email: sami_lcu@yahoo.com
Chong Hui Ling
University of Malaya Kuala Lumpur Malaysia
Contact No. +60 123495113,
Email: felicia.chonghl@gmail.com
Rashid Sbia*
*Department of Applied Economics
Free University of Brussels
Avenue F. Roosevelt, 50 C.P. 140
B- 1050 Brussels, Belgium
Rashid.Sbia@ulb.ac.be
2.3 Gap in previous studies

6. There are some gaps in previous studies.
1- The data they choose is not so effective.
2- A lot of time has passed on this topic but no effective results.
3- Some of them do copy paste and crammed.
4- Very few numbers of creativity on this topic.
5- There study is not so helpful for others.
2.4 purpose of study
Any kind of studies have a lot of purposes but my purpose of this study to overcome the current
situation and the worst situation of my country into best. The main purpose of study is to give
suggestions to our unstable economy’s economist that they do favor and focused on trade openness
because it will be helpful for our country’s economy to grow and how to reduce the consumption
by different alternative ways .UAE stands there economy by exporting and importing whether they
have Oil but oil is not depend on the stability of their country they do many of business they import
and export they give attention to tourism by achieving success in trade openness .
2.5 Significance ofstudy
Trade is the most compulsory component of any economy and how to reduce and bring innovation
in consumption in order to make effectiveness in reduction in consumption and grow new sources
for any country. this study is important for a undeveloped country that after reading it they will be
able to take decisions and having new ideas and well known about their new aims in the
betterment of their country .They also get to know about the problems of their countries this
article will be helpful in exploring and concluding the purpose that why they are going down.
2.6 Benefits for viewers
After reading my studies description people come to know the importance and worth of trade
openness and they also know that how they do betterment in their consumption .A lot of reason are
described in my article. This research article will be helpful for new researchers to get the work of
researcher more easier than now because after reading my article they will be completely know the
flaws of any economy .
3. Purposestatement

7. 3.1 General story
Trade openness affects energy demand via scale effect, technique effect and composite effect.
Other things being same, trade openness increases economic activities, thus stimulate domestic
production and hence economic growth. A surge in domestic production reshapes energy demand
because of expansion in domestic production commonly refers as scale effect. Such scale effect is
caused by trade openness. Economic condition of the country and extent of relationship between
economic growth and trade openness determine the impact of trade openness on energy
consumption. Openness to trade has been considered as an important determinant of economic
growth and a
Well debated issue in the recent growth literature. Initially, the developing nations of the world
Followed restrictive trade policies but with passage of time and emergence of globalization, all
The nations realized the need to liberalize to their economies in terms of trade openness.
3.2 Deeply description
Trade of a country is a key determinant for the improvement of a country’s industrialization. Moreover,
development experienced by a country brings some changes in trade structure on the basis of
endowments and comparative advantage (Hultman, 1967).
Energy plays a crucial role in the economic development of a country. It enhances the productivity
of factors of production and increases living standards. It is extensively recognized that economic
development and energy consumption are interdependent.1 The energy crisis of the 1970s and
persistently high energy prices, particularly oil prices, have had a significant impact on the
economic activity of developing economies.

8. 4. Objectiveof the study
4.1 Main objective
Main objective of the study is to find out the ways that give much response in making the better
economical situation of country. How the sources effect on economy and locating new horizons of
sources for consumption by this article readers will be able to affective thinking about economical
situation and how to improve it and how to get out of any worst situations.
4.2 sub objective
Sub objective of this study is to highlights the importance of TRADE by giving examples that trade
openness is the most effective act for up growing economy by using it economies got stability and
perfections in the world markets and also focuses on the energy consumption new ways to reduce
it and bring innovation in energy sector.
5. Research questions
5.1 Main questions
1- How an economygot equilibrium situation by Trade?
2-What is the main relationship between economyand energyconsumption?
3-How the stability situation will come in economy by making perfections in trade
and energysector?

9. 5.2 sub questions
1- Trade is a component but not necessaryfor stability of economy?
2-Energyconsumption is getting high day by day, how we overcome?
3-why these two trade/energy consumption have importance for any economy?
6. Research hypothesis
6.1 NUL
There is some nullify hypothesis in this topic is that these two variable is not enough to fulfill the
needs of economy and not so helpful but we can’t ignore it. Because these two have their own
importance but not so, for a growing economy needs are a lot but a few cannot achieve it.
6.2 Alternative
There is many good things and effective thing that bring reforms and goodness in economy, trade
openness is powerful tool for success in economy. In this research energy sector improvement by
using the best methods we could overcome many problems.
7. Significanceof study
7.1 Importance
My research paper is helpful on macro and micro level .After reading this reader will be able to
know the importance of trade and energy sector. when national level mean my country people read
it then they easily come to know the reasons and facts of success and this paper is also helpful for
international level because there is a lot of examples are given in my article about international
countries and this topic is discussed by different ways and methods. It is also useful for upcoming
researchers and students of research.
Energy affects trade openness via various channels. Firstly, energy is an important input of
production because machinery and equipments in the process of production require energy.
Secondly, exporting or importing manufactured goods or raw material requires energy to fuel
transportation. Without adequate energy supply, trade openness will be adversely affected.
Consequently, energy is an important input in trade expansion and adequate consumption of
energy is essential to expanding trade via expanding exports and imports. The relationship
between trade openness and energy consumption is important. If energy plays its key role to flow
exports or imports then any policies aiming at reduction energy consumption such as energy

10. conservation policies will negatively impact the flow of exports or imports and hence, reduce the
benefit of trade openness. The bidirectional causal relationship between trade openness and
energy consumption suggests in adopting energy expansion policies because energy consumption
stimulates trade openness and as result, trade openness affects energy consumption (Sadorsky,
2011). The energy conservation policies will not have an adverse effect on trade openness if
causality is running from trade openness to energy consumption or neutral effect exists between
trade openness and energy consumption (Sadorsky, 2011).
7.2 Nationallevel
Openness and trade liberalization influenced high rates of growth for the developing countries.
Liberalization and integration took place in the economies of almost all the developing countries
During the late 80s and early 90s, in the previous century, on the inspiration of international
Donor agencies to implement the structural adjustment programs. It is a well admitted fact
That along with trade variables industrial value added work as an impetus affecting economic
growth , positively. Pakistan also adopted the measures and policies to liberalize trade as a result
of Washington consensus
In the case of Pakistan, Riaz (1984) investigated the relationship between EC and EG using log
linear regression analysis. The regression analysis of the energy-growth relationship has shown
independence between socioeconomic variables and EC. Masih and Masih (1996) found a co-
integrated relationship between EC and GDP in India, Pakistan, and Indonesia, but no such
evidence in the case of Malaysia, Singapore, and the Philippines. Yang (2000) investigated the
causal relationship between GDP and EC—including that of coal, natural gas, and electricity—
analyzing the aggregate as well several disaggregated categories and found a bidirectional causality
between total EC and GDP in India; in the case of Pakistan and Indonesia, GDP was found to cause
EC. Anjum and Butt (2001) found that EG caused total EC, but further investigation indicated that
EG did not lead to growth in petroleum consumption, while in the case of the gas sector, neither EG
nor gas consumption affected each other. In the power sector, however, electricity consumption
was found to lead to EG without feedback. Finally, EC was found to directly cause employment.
Alam and Butt (2002) concluded that EC, EG, capital, and labor were co-integrated and that
causality ran from EC to EG in the short and long run.
7.3 International level
Energy consumption in the world increases parallel to technological development, increase in trade and
population growth. The world average energy consumption was 1454 Kg of oil equivalent per capita in
1980 while the amount increased to 1852 Kg of oil equivalent per capita 4
in 2015 According to American Energy Information Administration (EIA) and to the International
Energy Agency (IEA), the worldwide energy consumption will on average continue to increase by
2% per year. There are few studies that examined the relationship between energy consumption
and economic growth (Masih and Masih 1996, Yang 2000, Narayan et al. 2008), energy
consumption and exports (Narayan and Smyth 2009, Lean and Smyth 2011, Halicioglu 2010;
Hammad et al. 2015a). However, the relationship between trade openness and energy
consumption is still under studied. The objective of this study is to fill this gap by investigating the
relationship between trade openness and energy consumption using global data of 91 high, middle

11. and low-income countries for the period 1980-2015. The pooled mean group and mean group
models are used to show non-linear relationship between
8. Literaturereview
8.1 Background
There are few studies that examined the relationship between energy consumption and economic
growth (Masih and Masih 1996, Yang 2000, Narayan et al. 2008), energy consumption and exports
(Narayan and Smyth 2009, Lean and Smyth 2011, Halicioglu 2010; Shahbaz et al. 2013a). However, the
relationship between trade openness and energy consumption is still under studied. The objective of
this study is to fill this gap by investigating the relationship between trade openness and energy
consumption using global data of 91 high, middle and low-income countries for the period 1980-2015.
The pooled mean group and mean group models are used to show non-linear relationship between
trade openness and energy consumption.
8.2 Definition
The relationship between trade openness and energy consumption is important. If energy plays its key
role to flow exports or imports then any policies aiming at reduction energy consumption such as
energy conservation policies will negatively impact the flow of exports or imports and hence, reduce the
benefit of trade openness. The bidirectional causal relationship between trade openness and energy
consumption suggests in adopting energy expansion policies because energy consumption stimulates
trade openness and as result, trade openness affects energy consumption (Sadorsky, 2011). The energy
conservation policies will not have an adverse effect on trade openness if causality is running from trade
openness to energy consumption or neutral effect exists between trade openness and energy
consumption (Sadorsky, 2011).
Energy consumption in the world increases parallel to technological development, increase in trade
and population growth. The world average energy consumption was 1454 Kg of oil equivalent per
capita in 1980 while the amount increased to 1852 Kg of oil equivalent per capital.
8.4 Relationof variables
(1). TRADE
Openness to trade has been considered as an important determinant of economic growth and a
Well debated issue in the recent growth literature. Initially, the developing nations of the world
Followed restrictive trade policies but with passage of time and emergence of globalization, all

12. the nations realized the need to liberalize to their economies in terms of trade openness. Trade of
a country is a key determinant for the improvement of a country’s industrialization. Moreover,
Development experienced by a country brings some changes in trade structure on the basis of
Endowments and comparative advantage (Hultman, 1967).
(2).ENERGY CONSUMPTION
Energy plays a crucial role in the economic development of a country. It enhances the productivity
of factors of production and increases living standards. It is extensively recognized that economic
development and energy consumption are interdependent.1 The energy crisis of the 1970s and
persistently high energy prices, particularly oil prices, have had a significant impact on the
economic activity of developing economies. The key question in energy economics, however, is
whether economic growth (EG) leads to energy consumption (EC) or whether EC leads to EG.
Although the causal relationship between EC and economic growth (EG) has been widely studied
over the last 3 decades, the empirical evidence is not without controversy.
(3). TRADE AND CONSUMPTION WITH ECONOMICAL GROWTH
Energy affects trade openness via various channels. Firstly, energy is an important input of production
because machinery and equipments in the process of production require energy. Secondly, exporting or
importing manufactured goods or raw material requires energy to fuel transportation. Without
adequate energy supply, trade openness will be adversely affected. Consequently, energy is an
important input in trade expansion and adequate consumption of energy is essential to expanding trade
via expanding exports and imports. The relationship between trade openness and energy consumption
is important. If energy plays its key role to flow exports or imports then any policies aiming at reduction
energy consumption such as energy conservation policies will negatively impact the flow of exports or
imports and hence, reduce the benefit of trade openness. The bidirectional causal relationship between
trade openness and energy consumption suggests in adopting energy expansion policies because
energy consumption stimulates trade openness and as result, trade openness affects energy
consumption (Sadorsky, 2011). The energy conservation policies will not have an adverse effect on
trade openness if causality is running from trade openness to energy consumption or neutral effect
exists between trade openness and energy consumption (Sadorsky, 2011).
Energy consumption in the world increases parallel to technological development, increase in trade and
population growth. The world average energy consumption was 1454 Kg of oil equivalent per capita in
1980 while the amount increased to 1852 Kg of oil equivalent per capita 4
in 2013 According to American Energy Information Administration (EIA) and to the International
Energy Agency (IEA), the worldwide energy consumption will on average continue to increase by
2% per year.

13. 9. THEORETICAL FRAME WORK
9.1 DEPENDENT VARIABLE
1-Economy
2-Energy consumption
In this frame work Economy is dependent variable, because economy grows by trade and other
ways .Economy depends on income. Another dependent variable in this article is Energy
consumption because its depend on economy and trades and income.
9.2 INDEPENDENT VARIABLE
1-Trade
In this article, there is only one independent variable because if an economy does trade then
economy gets benefits but if not also got nothing. Trade is independent on macro level.
10. Methodology
ENERGY SECTOR: This study uses annual data from 1980 to 2013. GDP is measured in
millions of Pakistan rupees and EC in kiloton (kt) of oil equivalent. GDP is used as a proxy variable
for EG. Data for both variables are taken from Causality between energy Consumption & Economic
Growth 47

16. TRADE SECTOR : The results of unit root are reported below in Table . It is seen from the table that
all the
variables i.e. exports, imports, GDP and industrial value added are non stationary at level and
are stationary at first difference. It is concluding that all the variables are integrated of order one.

17. 10.3 DATA COLLECTION TECHNIQUES
We collect data in qualitative way . we choose some of the countries in the world which Are most
nominated economies in the world .

18. 10.4 Data analysis
All the data presented is through creativity except those which we mention in references. We also
have collected the data through websites and research article, which are given below in references.

19. 10.5 Reliability of Data
All the data is given correct authentic and by own creativity. It will be useful in the field of
economics and also applicable for research purposes.
11. LIMITATION OF STUDY
11.1 WEAKNESS OF MY STUDY
This study is applicable only in the field of economicsin macro level. Due to lack of resources, I can’t
highlights the all topics and issues which a unstable economy facesin trade sector and energy sector .. it is a
limited data not all over captured in this research paper . There are a few data of world good nominated
economies not all of the other weak and poor economies. I do my best but i can’t cover all of them.
12. ETHICAL CONSIDERATION
I HAVE WORKED ON IT FOR THE PURPOSE OF MY MSC ECO, DEGREE IN THE SUBJECT OF BRM. IT WILL
NOT BE APPLICABLE IN ANY DEGREE PURPOSES. IT IS ONLY FOR UPCOMING RESEARCH STUDENTS.
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APPENDIX

24. Different economies situations