Determinants of energy and material resources productivity

This paper examines the determinants of energy and material resources productivity in 36 countries over the period 2000–2019. We propose two distinct dynamic panel data models that include several socio-economic, environmental, globalisation, technological, regulatory, and policy factors. The empirical analysis reveals that economic development, labour productivity, population density, foreign direct investment, renewable energy consumption, energy prices, and net migration have a positive impact on energy productivity. Conversely, nominal exchange rate depreciation, financial development, exposure to extreme temperatures, natural resource rents, and natural resource extraction are associated with lower energy productivity. In addition, material productivity is positively influenced by economic and technological development, terrestrial protected areas, renewable energy consumption, energy prices, and material exports. However, it is hindered by trade openness, foreign direct investment, natural resource extraction, material footprint, and material imports. Overall, these results underline the complex interplay of factors influencing energy and material productivity and the need to carefully monitor them to facilitate the efficient use of natural resources for achieving both economic development and environmental sustainability. Accordingly, governments should design and implement integrated growth strategies and policies that prioritise energy- and resource-efficiency through targeted incentives and sustainable resource management.