Article 2025 · 5 citations

The impact of economic complexity on energy consumption risk

Isik, Cem, Ongan, Serdar, Kuziboev, Bekhzod, Turayev, Ogabek, Makhmudov, Samariddin, Nasretdinova, Farangis

Abstract

This study analyzes the impact of economic complexity (EC) on energy consumption risk (ECR) for 137 countries between 2000 and 2022. While existing studies generally relate EC to energy consumption or renewable energy, empirical research directly addressing ECR is quite limited. In this context, the MMQR is used to observe the effects across different ECR distribution quantiles and to address heteroskedasticity issues. The robustness of the findings is tested using Instrumental Variable (IV) Quantile Regression and alternative IV estimation methods such as Lewbel-IV, Kiviet-IV, Hausman-Taylor IV, and IV-GMM. The results show that economic complexity significantly and consistently reduces ECR across most quantiles. This finding suggests that increasing economic complexity enhances the resilience of energy systems and mitigates energy risks through technological advancements, innovation, and high-value-added production. From a policy perspective, strategies to improve economic complexity need to be prioritized to achieve energy security and sustainability.

Keywords

Energy consumption risk Economic complexity Method of moments quantile regression Globalization Technological development Institutional quality

WoS Categories

Environmental Sciences

Sustainable Development Goals

Industry, Innovation and Infrastructure Responsible Consumption and Production Climate Action Affordable and Clean Energy Decent Work and Economic Growth

Citation

Journal: JOURNAL OF ENVIRONMENTAL MANAGEMENT
Year: 2025
Volume: 394
ISSN: 0301-4797
eISSN: 1095-8630
DOI: 10.1016/j.jenvman.2025.127626
WoS UID: WOS:001597283200001

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