Technology Decomposition and Energy Intensity in OPEC Countries: DEA-Malmquist Approach

Reduction of energy intensity through gaining energy efficiency is a global agenda for sustainable development goals. The evidence show that the energy intensities of most energy exporting countries (such as OPEC) have historically been very high compared with energy importing and industrialized economies. Hence, the understanding of the main determinants (or drivers) of energy intensity in energy exporting countries is important for economic researchers and policymakers. Therefore, this paper investigates the role of technology and its components on energy intensity changes in OPEC countries using a DEA-Malmquist over the period of 2000-17. The findings show that technological progress has played a significant role in reducing of energy intensity. Moreover, the results after TFP decomposing using DEA method indicates that the negative effect of technical change on energy intensity is much larger than of the efficiency change effect, Although, the estimated values of these components are is relatively weak. Next, we investigate what is main driving of technological progress in the OPEC countries. The findings imply that trade openness is a main factor to causes to improve the productivity.