Energy security and economic development in large energy user countries

Abstract

It is widely acknowledged that economic development and energy complement each other, and global economies are consuming enormous amounts of energy to achieve economic growth. One of the prime concerns of policy makers is to ensure energy security in the country for sustainable development. This study examines the short and long run impact of energy security risk on GDP in large energy user countries. A panel Auto Regressive Distributed Lag (ARDL) approach is applied using the data from 1996 to 2020 for 23 countries. The results indicate that increasing energy security risk, in the long run, is negatively associated with all the countries' economic development. However, political globalization and foreign direct investment positively contribute to economic development. Thus, this study recommends that these countries focus more on attracting foreign investment, particularly in renewable energy to avoid uncertainty and long-term sustainability. In addition, there
is a pressing need to expand the worldwide political role.