Does Country-Risk Influence Energy Production Worldwide?
This paper investigates the relationship between country-risk within countries and en- ergy production. The determinants of energy production have been relatively neglected in the literature that favours the relationship between energy consumption, growth and development. We realistically assume cross-country correlations in income, country-risk and energy production and empirically establish that weighted conflict index, as well as sub-items as anti-government demonstrations, government crises and riots negatively in- fluence energy production, after controlling for income per capita, as a proxy for demand for energy, both domestic and foreign. Our error-correction approach allow to distinguish the long-run effects from the short-run effects. Country risks affect energy production mostly in the long-run.
Keywords - Energy production, income, country-risk.
JEL Codes - Q43, O17, O50