Changes in Production Structure and Natural Gas Consumption in Iran’s Provinces: Spatial Econometric Approach

Document Type : Research Article


University of Sistan and Baluchestan, Zahedan, Iran


change in production structure of an economy is one of the factors affecting economic variables such as energy consumption in different economic activities. Therefore, the purpose of this study is to investigate the direct and spillover effects of structural changes in production on natural gas consumption in different provinces of Iran during 2007-2018 using spatial econometrics approach. In this study, two indices including industry share in total output and the structural change index (NAV) were used to measure structural changes in the production of the economy. The results indicate that the direct effects of all variables except natural gas price are positive and significant. The direct effect of natural gas price (LGP) on the consumption of this energy is negative and significant. The direct effect of GDP, industrialization, production structure change and urbanization were positive and significant. Spillover effect of the industrialization and change in production structure were positive and significant on natural gas consumption


Main Subjects

Abu Nouri, A., and Roud Bari, M. (2016). The relationship between energy intensity and industrialization rate in oil and non-oil countries. Iranian Energy Journal, 1(2), 141-160.
Adebayo, T. S., Ibrahim, L. Hossam, B. A., and Kamel, S. (2022). The environmental aspects of renewable energy consumption and structural change in Sweden: A new perspective from wavelet-based granger causality approach. Helyon, 8(9), e10697.
Aghaei, M. and Ghanbari, A., and Aqli, L., and Sadeghi, H. (2011). Investigating the relationship between energy consumption and economic growth in Iran's provinces using the co-accumulation model and multivariate panel error correction. Economics and Modeling Quarterly, 3(9), 148-185.
Bahmani, M. and Ansari Lari, M., and Jamshid Nejad, A. (2014). Investigating factors affecting energy consumption in the domestic sector of the country's provinces. Quarterly Journal of Energy Economics Studies, 10(42), 161-181.
Baranzini, A., Weber, S., Bareit, M., and Mathys, N., A. (2013). The causal relationship between energy use and economic growthin Switzerland. Energy Economics, 36 (1), 464-470.
Behboudi, D., Mohamadzadeh, P., and Moosavi, S. (2017). The nexus of renewable energy - sustainable development - environmental quality in Iran: Bayesian VAR approach. Environmental Energy and Economic Research, 1(3), 321-332.
Chen, S., Jin, H., and Lu, Y. (2018). Impact of urbanization on CO2 emissions and energy consumption structure: apanel data analysis for Chinese prefecture-level cities. Structural change and economic dynamics, 49, 107-119.
Cortuk, O., and Singh, N. (2011). Structural change and growth in India. Economics Letters, 110(3), 178-181.‏
Delnajian, S. and Rezaei, L., and Beharipour, S. (2015). The effect of industrial structure on the intensity of energy consumption in the industrial industries of Iran. Policy and Planning Research Quarterly, 2(3), 133-168.
Eggoh, J. C., Bangake, C., and Rault, C. (2011). Energy Consumption and Economic Growth Revisited in African Countries. Energy Policy, 39, 7408–7421.
Eghbali, L., Ranjpour, R., and Sadeghi, S. K., (2020). Study the causal relationship between energy consumption and added value below Iran's industrial sectors: a panel bootstrap approach. Journal of Applied Theories of Economics, 7(3), 99-130. 
Elah Asgari, H. and Aali, R., and Masrashli, A. (2016). The effect of oil export on the convergence or divergence of GDP per capita of OPEC member countries with a spatial econometric approach. Quarterly of Quantitative Economic Studies, 14(1), 31-66.
Elhorst, J. P. (2014). Spatial panel data models. In Spatial econometrics (pp. 37-93). Springer, Berlin, Heidelberg.‏
Fatemi Bushehri, S. M. M., Dehghan Khavari, S., Mirjalili, S. H., Meybodi, H. B., and Sardari Zarchi, M. (2022). Energy Consumption Prediction in Iran: A Hybrid Machine Learning and Genetic Algorithm Method with Sustainable Development Considerations. Environmental Energy and Economic Research, 6(2), 1-16. 
Ghani, G. M. (2012). Does trade liberalization effect energy consumption. Energy Policy, 43, 285-290.
Ghasemi, A. (2017). A review of the evolution of energy economy indicators in the agricultural sector. Economic Magazine - a monthly review of economic issues and policies, 12(3), 169-184.
 Golkhandan, A., and Alizadeh, M. (2016). the relationship between the consumption of energy carriers and the added value of Iran's economic sectors, Granger causality test in heterogeneous mixed panels. Iran Energy Economy Research Journal, 7(25), 158-125.
Hao, Y., and Peng, H. (2017). On The convergence in china’s provincial per capita energy consumption: New evidence from a spatial econometric analysis. Energy Economics, 68, 31-43.
Iqbali, A., Gaskeri, R., Moradi, M., and Parhizhi, H. (2014). Studying the intensity of energy consumption in oil and non-oil countries. Economic Research Quarterly, 50(1), 25-1.
Issa-zadeh, S., and Mehranfar, J. (2013), Investigating the relationship between energy consumption and the level of urbanization in Iran, using the error correction model and the factor analysis method. Ezhariyat Ekhmani, 1(2), 47-70.
Jahangard, O., Golshani, R., Abdullah Milani, M., and Ghafarzadeh, H. (2016). Analysis of energy consumption in Iran 1380-1390, a comparative static analysis with the SDA approach. Applied Economics Quarterly, 7(20), 1 -10.
Jiang, L., Folmer, H., and Ji, M. (2014). The drivers of energy intensity in China: A spatial panel data approach. China Economic Review, 31, 351-360.
Jones, D.W. (2004). Urbanization and Energy, RCF economic and financial consulting Inc. United State, Chicago.
Kamali Dehkordi, P., Mombeni, Z., Abdollahi, F., and Ghabishavi, A. (2021). Spatial effect of urbanization on energy consumption in selected OPEC member countries using the STIRPAT spatial approach, Economic policy, 13(26), 287-311.
 Karimi, M., and Heydarian, M. (2016). Investigating the relationship between urbanization and energy consumption in the provinces of Iran using the generalized STIRPAT model. Valgo Sazi Economics Quarterly, 8(31), 27-54.
Kohensal, M., and Shayan Mehr, S. (2015). the mutual effects of energy consumption, economic growth and environmental pollution using the spatial simultaneous equation model of panel data. Iran Energy Economics Research Journal, 5(19), 216-179.
Li, K., and Lin, B. (2015). Impacts of urbanization and industrialization on energy consumption/CO2 emissions: does the level of development matter. Renewable and Sustainable Energy Reviews, 52, 1107-1122.
Mahdavi Adeli, M., and Ghanbari, A. (2013). experiment and analysis of the association and causality relationship between carbon dioxide emission, gross domestic product and energy consumption in Iran. Iran Energy Economy Research Journal, 3(9), 217-237.
Mohammadi, T., Nazman, H., and Nasratian Nesab, M. (2016). The relationship between economic growth and energy consumption in Iran (an analysis of linear and non-linear causality models). Environment and Energy Quarterly, 2(5), 153-170.
Moshiri, S., and Al-Tajaei, A. (2007). The effect of structural changes on the economic growth of newly industrialized countries. Iran Economic Research Quarterly, 12(36), 113-85.
Nagheli, S., Madah, M., and Abunouri, A. (2017). The effect of government fragility on Iran's exports to Southeast Asian countries with a spatial econometric approach. Economic Modeling Quarterly, 12(3), 51-77.
Poumanyvong, P., and Kaneko, S. (2010). Does urbanization lead to less energy use and lower CO2 emissions? A cross-country analysis. Ecological Economics, 70(2), 434-444.
Salatin, M., and Mohammadi, S. (2016). The effect of urbanization on energy consumption in selected countries. Quarterly Journal of Urban Management Studies, 8(26), 71-80.
 Salimifar, M., Haqnejad, A., and Rahimi, M. (2009). Investigating the impact of production factors on energy intensity in Iran, an analysis based on the Cobb-Douglas function. Knowledge and Development Magazine (Scientific and Research), 17(34), 1-20.
Seif, A., and Hamidi Rozi, D. (2016). Factors affecting the energy consumption intensity index of the provinces of the country, using spatial dynamic panel data approach. Quarterly Journal of Energy Economics Studies, 13(53), 103-61.
 Shahbazi, K., Asgharpour, H., and Moharramzadeh, K. (2016), the effect of consumption of petroleum products on economic growth in the provinces of the country. Economic Modeling Quarterly, 6(1), 25-44.
Shahnazi, R., Hadian, O., and Jergani, L. (2016). Investigating the causal relationship between the consumption of energy carriers, economic growth and carbon dioxide in Iran's economic sectors. Journal of Economic Growth and Development Research, 7928f, 51-70.
Shakibaei, A., Kamal al-Dini, Z., Taleghani, F., and Ahmadinejad, M. (2014). The impact of urbanization on the speed of convergence of urban and rural income distribution in selected provinces of Iran with a spatial econometric approach. Economic Research Quarterly, 15 (57), 109-140.
Sharify, N., and Hosseinzadeh, R. (2016). The Effect of Exports between Regions on the Growth of Regional Production: a Case Study of Golestan Province and other Regions using Two-region Data-output Analysis. Journal of Economic Modeling Research, 24(2), 123-146.
 Taleblo, R., Mohammadi, T., and Pir Dayeh, H. (2016). Spatial Diffusion Analysis of Housing Price Changes in Iran's Provinces. Spatial Econometric Approach, Economic Research Quarterly, 17(66), 55-95.
Tan. Y., and Uprasen. U. (2022). The effect of foreign direct investment on renewable energy consumption subject to the moderating effect of environmental regulation: Evidence from the BRICS countries. Renewable Energy, 201(2), 135-149. 
Tsani, S. (2010). Energy consumption and economic growth: A causality analysis for Greece. Energy Economics, 32 (3), 582-590
Vafaei, E., Pendar, M., and masoumzadeh, A. (2022). Investigating the indirect effect of financial development on energy consumption. Program and Development Research, 2(7), 99-115.
Wandji, Y. (2013). Energy consumption and economic growth: Evidence from Cameroon. Energy Policy, 61, 1295-1304.
Wang, H., Ang, B.W., and Su, B., (2017a). Assessing drivers of economy-wide energy use and emissions: IDA versus SDA. Energy Policy, 107, 585–599.
Wang, Q., Su, M., Li, R., and Ponce, P. (2019). The effects of energy prices, urbanization and economic growth on energy consumption per capita in 186 countries. Journal of Cleaner Production, 225 (10), 1017-1032.
Wang, Q., Zeng, Y. E., and Wu, B. W. (2016). Exploring the relationship between urbanization, energy consumption, and CO2 emissions in different provinces of China. Renewable and sustainable energy reviews, 54, 1563-1579.
Xie, S.C. (2014). The driving forces of China's energy use from 1992 to 2010: An empirical study of input–output and structural decomposition analysis. Energy Policy, 73, 401–415.
Xu, Q., and Zhong, M. (2023). The impact of income inequity on energy consumption: The moderating role of digitalization. Journal of Environmental Management, 325, 116464.
Yang, Y., Liu, J., Lin, Y., and Li, Q. (2018). The impact of urbanization on China’s residential energy consumption. Structural Change and Economic Dynamics, 49, 170-182.
Zhang, C., and Lin, Y. (2012). Panel estimation for urbanization, energy consumption and CO2 emissions: A regional analysis in China. Energy policy, 49, 488-498.