Oil Price and Energy Intensity Dynamics in Nigeria: Does Technical Change Matter?

• Main Authors: Olusegun Felix, Ayadi, Johnnie, Williams, Babatunde Olufemi, Oke
• Format: Article
• Language: English
• Published: INTI International University 2024
• Subjects: H Social Sciences (General); HB Economic Theory; HD28 Management. Industrial Management
• Online Access: http://eprints.intimal.edu.my/1998/1/538; http://eprints.intimal.edu.my/1998/; http://ipublishing.intimal.edu.my/jobss.html
• Institution: INTI International University

It is critical to understand the mechanism needed to control energy intensity especially in an oilexporting country like Nigeria, because of its consequential effect on carbon dioxide emissions and environmental pollution. Increases in energy prices can lead to promotion of better technology and consequently, a reduction in energy intensity through a reduction in energy demand (consumption). This paper explores the dynamics between energy price and energy intensity to reveal the role of technical change in the equation. The study utilizes an autoregressive distributed lag (ARDL) and Toda-Yamamoto approaches. The study sample covers the period 1980 through 2021. The key contribution of this study to the literature is rooted in an understanding of the dynamics of energy intensity and its interplay with technical change in a country study as a critical piece of information for policymakers. The results indicate a change in oil price significantly affects technical innovation. However, there is no link between technical innovation and energy intensity. The plausible justification for the results is the enormity of oil subsidy policy of the Nigerian government.