Bioenergy industry and the growth of the energy sector in the EU-28 region: Evidence from panel cointegration analysis

This study attempts to find whether the bioenergy industry contributed to the growth of the energy sector in the EU-28 region from 1990 to 2013. This study adopts the framework of the conventional production function to identify the influence of the bioenergy industry on the growth of the energy totality industries in the EU-28 region. To this goal, the authors apply the unit root test, panel cointegration test, cointegration estimate analysis, and heterogeneous panel causality test. The key finding of this study is that the bioenergy industry's determinant consumption and labour and capital inputs have an important and positive effect on the outgrowth of the energy section. This study showed that there is a significant long-run balanced correlation between the bioenergy industry and the outgrowth of the energy sector in the EU-28 region. Heterogeneous panel causality results show that bioenergy consumption and capital input of the bioenergy industry have an important and positive correlation with the growth of the energy sector in EU28. Also, the results show that bioenergy consumption, capital input of bioenergy, and labour input of the bioenergy industry have important and positive relationships with the growth of the energy sector in EU28 developed states. Moreover, heterogeneous panel causality results show that bioenergy consumption and labour input of the bioenergy industry have important and positive correlations with the growth of the energy sector in EU28 developing states. With reference to the studied panel dataset implicating all 3 models, the findings boost the growth hypothesis. The implications of such analysis for the EU energy policy makers are related to competitiveness, sustainable development, and the security of energy supply. The results showed that the bioenergy industry have an important effect on the growth of the energy sector in the EU-28 region. Published by AIP Publishing.