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ISRN Economics
Volume 2012 (2012), Article ID 816964, 11 pages
http://dx.doi.org/10.5402/2012/816964
Research Article

The Linkage between Imported Energy and Trade in Taiwan

1Institute of Business and Management, National Chiao Tung University, 118 Chung-Hsiao W. Road, Section 1, Taipei City 100, Taiwan
2Institute of Economics, Academia Sinica, Taipei City 11529, Taiwan
3Science & Technology Policy Research and Information Center, National Applied Research Laboratories, Taipei City 10636, Taiwan

Received 14 April 2012; Accepted 21 June 2012

Academic Editors: S. Cameron and B. M. Tabak

Copyright © 2012 Jin-Li Hu et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study examines the Granger causality between Taiwan's aggregate and disaggregate energy consumption and trade variables, including total imports (IM), total exports (EX), total energy consumption (ENERGY), oil and petroleum products consumption (OIL), coal and coal products consumption (COAL), natural gas consumption (GAS), export value of the industrial sector (EX_I), export value of heavy-chemical industrial products (EX_HI), and export value of non-heavy-chemical industrial products (EX_NHI) with monthly data during 1998–2009. Via applying Hsiao's version of the Granger causality method, the results find causality running from ENERGY to IM, EX, EX_I, and EX_HI. The impulse-response simulations show that the above relations have positive responses at the initial period. OIL Granger causes all trade variables. The impulse directions to IM and EX_NHI are negative, whereas others are positive. On the other hand, COAL responds to impulses in all trade variables. The impulse-response simulations show that these relations have positive responses at the initial period except for causality running from EX_HI and EX_NHI to COAL. GAS positively responds to impulses in EX, EX_I, and EX_HI at the initial period. The bidirectional Granger causality between pairs of variables (such as GAS and EX_NHI as well as GAS and EX_HI) is found.