Abstract:
I n addition to labor force and capital, energy plays a significant role in the production of commodities and services. Energy is the driving force of production activities. Therefore, it is an essential ingredient of growth and development. Results obtained from this paper show that the growth of oil products consumption has a positive effect on economic development via two channels: Firstly, increase of oil products consumption results in an increase of the profit of firms’ consumption, and subsequently, increase of firms’ motivation leads to more application of advanced equipment and high technologies and, ultimately, enhancement of development. Secondly, increase of oil products consumption leads to an increase in the employment of labor force, and subsequently, an increase of capital and investing equipment; this will ultimately be followed by the improvement of development. At last, this development turns into a factor for the higher usage of oil products aiming at higher production and profits. Also, in this paper, we present four hypotheses about the relationship between energy consumption and economic growth, including: Growth Hypothesis, Conservation Hypothesis, Feedback Hypothesis, and Null Hypothesis. The results show that Conservation Hypothesis and Null Hypothesis are rejected, but Growth Hypothesis and Feedback Hypothesis are accepted for Iran and the countries which have a significant dependence on energy.
Machine summary:
Investigating the Impact of Growth of Petroleum Products Consumption on Economic Development with a Systematic Dynamics Approach in Developing Countries Hossein-Ali Fakher1 Seyed Ahmad Goldansaz2 Received: 2015/03/10 Accepted: 2016/01/05 Abstract n addition to labor force and capital, energy plays a significant role in the production of commodities and services.
Results obtained from this paper show thatthe growth of oil products consumption has a positive effect oneconomic development via two channels: Firstly, increase of oilproducts consumption results in an increase of the profit of firms’consumption, and subsequently, increase of firms’ motivation leads tomore application of advanced equipment and high technologies and,ultimately, enhancement of development.
In this part, we investigate the researches that have been done regarding the relationship between energy consumption such as petroleum products and economic growth.
The results demonstrated that there is a bidirectional causal relationship between petroleum products consumption and growth of economic parts.
Fallahi and Montazeri (2010) studied the relationship between petroleum products consumption and economic growth in Iran.
Arman and Zare (2005) have studied the Granger causality relationship between energy consumption and economic growth in Iran during the years 1967-2002.
The results obtained from their study demonstrated that there is a two-way Granger causality relationship between energy carriers’ consumption and growth of economic parts in Iran.
Hence, energy plays a significant role in increasing the productivity levels of production factors and living standards, so economists emphasize the existence of a close relationship between energy consumption and economic growth and development (Adnan Hye and Riaz, 2008, p.