Energy Economics 82 (2019) 78–84

Contents lists available at ScienceDirect

Energy Economics
journal homepage: www.elsevier.com/locate/eneeco

A (negative) replication of ‘The relationship between energy

consumption, energy prices, and economic growth: Time series
evidence from Asian developing countries’ (Energy Economics, 2000)
Janelle Mann a,∗ , Peter Sephton b
a
University of Manitoba, Economics Department, Winnipeg, MB, R3T 2N2, Canada
b
Queen’s University, Smith School of Business, Kingston, ON, Canada

a r t i c l e i n f o a b s t r a c t

Article history: This paper replicates Asafu-Adjaye (2000) which employs unit root and cointegration tests together with
Received 14 August 2017 error correction models to investigate the relationships between energy consumption and income for
Received in revised form 27 April 2018 four energy-dependent Asian developing countries using data from 1971 through 1995. This paper finds
Accepted 1 May 2018
not only that the results cannot be replicated, but that the results are not robust to alternative estimation
Available online 2 May 2018
procedures that include the simulation of finite sample critical values and the extension to panel unit
root, stationarity and cointegration tests which are necessary to improve upon the power properties of
JEL classification:
the short time series employed by Asafu-Adjaye (2000). The results from the extension of the analysis to
C32
C22
more modern time series techniques disprove the original paper’s results, with panel cointegration tests
Q43 finding that the trivariate system (income, energy consumption, and prices) does not follow a long run
Q48 relationship for India, Indonesia, Thailand, and the Philippines.
© 2018 Elsevier B.V. All rights reserved.
Keywords:
Energy consumption
Economic growth
Negative replication
Finite sample critical values
Panel cointegration

1. Introduction
This paper replicates ‘The relationship between energy con-
sumption, energy prices, and economic growth: time series
evidence from Asian developing countries’ (Asafu-Adjaye, 2000)
which investigates the relationships between energy consumption
and income for four Asian developing countries using data from
1971 through 1995 and a trivariate model containing income (GNP
per capita), energy consumption (EN - commercial energy use in
kilograms of oil equivalent per capita), and prices (CPI). The time
series analysis1 conducted by Asafu-Adjaye (2000) is used to pro-
vide recommendations to policy makers regarding the (potentially)
adverse effects of energy conservation policies on economic growth
and has been cited over 1000 times. The citations for Asafu-Adjaye
∗ Corresponding author.
E-mail addresses: janelle.mann@umanitoba.ca (J. Mann),
peter.sephton@queensu.ca (P. Sephton).
1
For an updated panel data analysis between income, energy demand and prices
within the EU see Fotis et al. (2017).
(2000) peaked in 2014 with 175 citations, followed by 147 in 2016
and 145 in 2013 (Google Scholar Citations, 2018). Despite being
published almost two decades ago Asafu-Adjaye (2000) continues
to be cited in leading journals such as PLoS One, Energy Economics,
and Energy Policy.
This replication study follows the standard four-part format of
Reed and Alm (2015). This introduction (Section 1) showcases the
importance of the original study. Section 2 replicates the original
study and includes four tables (Tables 1, 2, 3, and 4) that contain
both the original study’s results and this replication study’s results
side-by-side. Section 3 extends the original study’s time series tech-
niques by simulating the finite critical values for unit root and
stationarity tests (Table 5), employing panel unit root and panel
cointegration tests (Tables 6 and 7) to improve on power proper-
ties of traditional cointegration tests, and estimating a panel vector
autoregressive (VAR). Section 4 concludes and summarizes results
of Asafu-Adjaye (2000) that have been disproved.

https://doi.org/10.1016/j.eneco.2018.05.005
0140-9883/© 2018 Elsevier B.V. All rights reserved.
 J. Mann and P. Sephton / Energy Economics 82 (2019) 78–84 79

Table 1
Data: Comparison between Asafu-Adjaye (2000) and replication study.

Indicator Source India Indonesia Thailand Philippines

GNP per capita 1996 (US$) Asafu-Adjaye (2000) 380 1080 2960 1160
Replication Data 380 1080 2960 1160
Energy use per capita (kg) Asafu-Adjaye (2000) 260 442 878 307
Replication Data 259.632 442.245 877.510 306.573
CPI (Base Year = 1987) Asafu-Adjaye (2000) Not reported Not reported Not reported Not reported
Replication Data 208.126 189.968 146.520 228.419

Notes: Values from Source “Asafu-Adjaye (2000)” taken from Table 1 of Asafu-Adjaye (2000) which cites World Bank (1998). Values from source “Replication Data” taken
from World Bank (1998) with the following Series Names/Series Codes: GNP per capita, Atlas method (current US$)/NY.GNP.PCAP.CD; Commercial energy use (kg of oil
equivalent per capita)/EG.USE.PCAP.KG.OE and Consumer price index (1987 = 100)/FP.CPI.TOTL.

Table 2
ADF unit root test results: Comparison between Asafu-Adjaye (2000) and replication study.

Country Asafu-Adjaye (2000) Replication Replication Asafu-Adjaye (2000) Replication Replication

Variable Det = C Det = C&T Det = C Det = C&T

Level 

India
yt −1.26 −1.223 −3.612∗∗ −3.71∗∗ −4.362∗∗∗ −4.720∗∗∗
ent −1.92 3.246 −0.880 −2.81∗ −3.749∗∗ −6.693∗∗∗
pt −0.35 5.463 1.717 −4.53∗∗∗ −0.811 −3.255∗

Indonesia
yt −0.03 0.212 −2.356 −3.65∗∗ −1.045 −1.073
ent −0.96 1.413 −1.159 −3.77∗∗∗ −3.219∗∗ −4.413∗∗∗
pt −4.49∗∗∗ 7.416 3.420 −3.11∗∗ −1.025 −2.527

Thailand
yt −0.61 2.669 1.570 −2.27 0.263 −0.985
ent −1.73 6.083 2.197 −2.55 −0.733 −2.578
pt −2.73∗ −0.174 −3.017 −3.15∗∗ −3.094∗∗ −3.026

Philippines
yt −1.58 −0.397 −1.842 −3.15∗∗ −3.109∗∗ −2.959
ent −1.95 −1.695 −2.274 −3.35∗∗ −5.434∗∗∗ −5.358∗∗∗
pt −1.16 2.804 −0.318 −4.33∗∗∗ −1.292 −3.877∗∗

Notes: All results in this table incorporate data from 1971 to 1995 for Thailand and Philippines but only 1973–1995 for India and Indonesia. Column “Asafu-Adjaye (2000)”
copied from Table 1 of Asafu-Adjaye (2000) contains the test statistics for the ADF unit root test with a C. Columns ‘Replication Det = C’ present the replicated results using
the same input specifications as the original study. Columns ‘Replication Det = C&T’ are identical to ‘Replication Det = C’ except they include both a C&T as deterministic
components. Optimal lag length is selected from a maximum of T1/3 = 3 by minimizing the AIC (if the MAIC of Ng and Perron (2001) is used in place of the AIC to select the
lag length the number of conflicting conclusions in Table 2 increases by two). Critical values follow Hamilton (1994). Significance at ␣ = 0.01, 0.05, and 0.10 is denoted by ∗∗∗ ,
∗∗
, and ∗ respectively. Bolded text indicates a discrepancy between the conclusion of this replication study and the original study with respect to the null hypothesis being
tested.

Table 3
PP unit root test results: Comparison between Asafu-Adjaye (2000) and replication study.

Country Asafu-Adjaye (2000) Replication Replication Asafu-Adjaye (2000) Replication Replication

Variable Det = C Det = C&T Det = C Det = C&T

Levels First differences

India
yt −2.51 −1.516 −1.772 −6.29∗∗∗ −2.868∗ −2.765
ent −1.39 3.385 −0.898 −5.83∗∗∗ −4.464∗∗∗ −6.808∗∗∗
pt −0.07 10.376 3.065 −3.79∗∗∗ −0.999 −3.408∗

Indonesia
yt −0.24 −0.116 −1.339 −4.74∗∗∗ −1.141 −1.061
ent −1.35 1.370 −1.308 −3.73∗∗ −4.348∗∗∗ −4.962∗∗∗
pt −5.35∗∗∗ 6.203 4.236 −2.64∗ −0.012 −2.247

Thailand
yt −1.23 5.945 2.482 −2.87∗ 0.434 −1.027
ent −2.39 7.884 3.186 −2.80∗ −0.094 −2.328
pt −3.04∗∗ 0.439 −1.847 −2.61 −2.684∗ −2.688

Philippines
yt −1.90 −0.548 −1.720 −2.32 −1.900 −1.878
ent −1.39 −1.361 −2.353 −5.78∗∗∗ −5.687∗∗∗ −5.746∗∗∗
pt −1.30 3.743 −0.537 −3.97∗∗∗ −2.484 −3.888∗∗

Notes: All results in this table incorporate data from 1971 to 1995 for Thailand and Philippines but only 1973–1995 for India and Indonesia. Column ‘Asafu-Adjaye (2000)’
copied from Table 1 of Asafu-Adjaye (2000) contains the test statistics for the PP unit root test with a C. Columns ‘Replication Det = C’ present the replicated results using
the same input specifications as the original study. Columns ‘Replication Det = C&T’ are identical to ‘Replication Det = C’ except they include both a C&T as deterministic
components for the level data. Truncation lag is selected as the highest significant lag from the ACF or PACF for the differenced () data echoing the method by Asafu-Adjaye
(2000). Critical values follow MacKinnon (1991). Significance at ␣ = 0.01, 0.05, and 0.10 is denoted by ∗∗∗ , ∗∗ , and ∗ respectively. Bolded text indicates a discrepancy between
the conclusion of this replication study and the original study with respect to the null hypothesis being tested.
80 J. Mann and P. Sephton / Energy Economics 82 (2019) 78–84

Fig. 1. GNP per capita ($US) from 1971 to 1995 (yt ).

NOTES: Data with Series Name/Series Code GNP per capita, Atlas method (current US$)/NY.GNP.PCAP.CD extracted from World Bank (1998). Scale for India is on the left,
scale for remainder is on the right.

Fig. 2. Commercial energy use (kg of oil equivalent per capita) from 1971 to 1995 (ent ).
NOTES: Data with Series Name/Series Code: Commercial energy use (kg of oil equivalent per capita)/EG.USE.PCAP.KG.OE extracted from World Bank (1998). Scale for India
and Philippines is on the left, scale for remainder is on the right.

Fig. 3. CPI (Base Year = 1987) from 1971 to 1995 (pt ).

NOTES: Data with Series Name/Series code Consumer price index (1987 = 100)/FP.CPI.TOTL extracted from World Bank (1998).
 J. Mann and P. Sephton / Energy Economics 82 (2019) 78–84 81

Table 4
Johansen’s cointegration test (max ) results: Comparison between Asafu-Adjaye (2000) and replication study.

Country Null/alternative hypothesis Asafu-Adjaye (2000) Replication Restricted Constant Replication Unrestricted Constant

India
r = 0/r = 1 38.78∗∗∗ 28.700∗∗∗ 28.332∗∗∗
r = 1/r = 2 8.29 10.527 10.253
r = 2/r = 3 1.64 4.319 3.221∗

Indonesia
r = 0/r = 1 54.83∗∗∗ 29.199∗∗∗ 23.319∗∗
r = 1/r = 2 21.29∗∗ 18.295∗∗ 12.013
r = 2/r = 3 0.37 8.903∗ 6.407∗∗

Thailand
r = 0/r = 1 41.78∗∗ 24.718∗∗ 22.667∗∗
r = 1/r = 2 9.53 14.492∗ 7.888
r = 2/r = 3 0.18 5.629 2.794∗

Philippines
r = 0/r = 1 34.00∗ 25.132∗∗ 21.602∗∗
r = 1/r = 2 12.61 13.762 13.414∗
r = 2/r = 3 3.31 9.101∗ 9.082∗∗∗

Notes: All results in this table incorporate data from 1971 to 1995 for Thailand and Philippines but only 1973–1995 for India and Indonesia. Optimal lag length for cointegration
tests is selected from T1/3 = 3 by minimizing the AIC. Significance at ␣ = 0.01, 0.05, and 0.10 is denoted by ∗∗∗ , ∗∗ , and ∗ respectively.

Table 5
Results from unit root and stationarity tests on level data with simulated finite sample critical values.

Country ADF by ADF ADF PP by PP PP EFDF KPSS GKPSS

Variable Asafu-Adjaye (2000) C&T C&T Asafu-Adjaye (2000) C&T C&T C&T C&T C&T

India
yt −1.26 −3.720∗∗ −3.720∗ −2.51 −1.711 −1.711 −1.352 0.310∗∗∗ 0.122
ent −1.92 −1.169 −1.169 −1.39 −1.016 −1.016 −0.640 0.603∗∗∗ 0.142
pt −0.35 2.048 2.048 −0.07 3.354 3.354 1.125 0.565∗∗∗ 0.148

Indonesia
yt −0.03 −2.608 −2.608 −0.24 −1.258 −1.258 6.180 0.288∗∗∗ 0.086
ent −0.96 −1.110 −1.110 −1.35 −1.186 −1.186 −0.430 0.475∗∗∗ 0.138
pt −4.49∗∗∗ 2.458 2.458 −5.35∗∗∗ 2.763 2.763 5.512 0.502∗∗∗ 0.154

Thailand
yt −0.61 1.570 1.570 −1.23 2.482 2.482 8.204 0.509∗∗∗ 0.140
ent −1.73 2.197 2.197 −2.39 3.186 3.186 0.891 0.567∗∗∗ 0.142
pt −2.73∗ −3.017 −3.017 −3.04∗∗ −1.847 −1.847 1.042 0.177∗∗ 0.062

Philippines
yt −1.58 −1.842 −1.842 −1.90 −1.720 −1.720 3.195 0.267∗∗∗ 0.136
ent −1.95 −2.274 −2.274 −1.39 −2.353 −2.353 1.236 0.201∗∗ 0.136
pt −1.16 −0.318 −0.318 −1.30 −0.537 −0.537 3.001 0.574∗∗∗ 0.151

Critical values Hamilton (1994) Hamilton (1994) Simulated MacKinnon (1991) MacKinnon (1991) Simulated Simulated Simulated Simulated

1% −3.75 −4.38 −4.987 −3.750 −4.417 −4.398 −3.685 0.210 31.821

5% −3.00 −3.60 −4.091 −2.997 −3.622 −3.490 −2.925 0.148 5.654
10% −2.63 −3.24 −3.708 −2.638 −3.247 −3.094 −2.505 0.121 2.275

Notes: Column “Asafu-Adjaye (2000)” copied from Table 1 of Asafu-Adjaye (2000) contains the test statistics for the ADF unit root test with a C using data from 1971 to
1995 for Thailand and Philippines but only 1973–1995 for India and Indonesia. All columns except Asafu-Adjaye (2000) include data from 1971 to 1995 with a constant and
trend as deterministic components. The unit root tests select the lag length from a maximum of T1/3 = 3 by minimizing the AIC. The left column ‘ADF C&T’ contains the test
statistics for the ADF unit root test with critical values following Hamilton (1994). The right column ‘ADF C&T’ is identical to the left column except that the finite sample
critical values are simulated for a sample size of 25 with 10,000 replications. The column ‘EFDF C&T’ contains the test statistics for the null hypothesis of a unit root against a
fractional alternative. The finite sample critical values are simulated for a sample size of 25 with 10,000 replications. The column ‘PP C&T’ contains the PP unit root test with
three lags and simulated critical values for a sample of 25 with 10,000 replications. The columns ‘KPSS C&T’ and ‘GKPSS C&T’ contain the test statistics for the null hypothesis
of stationarity with finite sample critical values simulated for a sample size of 25 with 1000 replications. Significance at ␣ = 0.01, 0.05, and 0.10 is denoted by ∗∗∗ , ∗∗ , and ∗
respectively.

2. Replication of original study
The same 1998 publication (with CD-ROM) of the World Devel-
opment Indicators published by the World Bank (1998) is cited as
the data source for the original study and was used to extract2 the
time series from the database for 1971 through 1995.3 A table of
summary statistics is not included in the original study, but one
value from each time series was included in Table 1. The identical
time series were located using the precise definitions provided in
the original study. The side-by-side presentation of the data values
in Table 1 provide evidence that the time series in this replication
study match the time series in Asafu-Adjaye (2000). The origi-
nal study did not provide a data value for CPI (Base Year = 1987),

2
We gratefully acknowledge the assistance of Gary Strike (Reference Librarian)
for his assistance in locating the archived CD-ROM and a laptop with WindowsXP
to extract the data series. Without his help, this replication study would not have 1971–1995.” However, the 1998 CD-ROM contains data from 1971 through 1995 for
been possible. all four countries. The reduced time series for India and Indonesia is used through-
3
The original study states, “The series for India and Indonesia cover the out the replication of the original study (Section 2) but the full time series is used in
period 1973–1995, while those for Thailand and the Philippines cover the period the extension of the original study (Section 3).
82 J. Mann and P. Sephton / Energy Economics 82 (2019) 78–84
Table 6
Pesaran (2004), unit root, and stationarity test results.
Variable Pesaran (2004) Im et al. (2003) Hadri (2000)
Cross section Panel unit root Panel
dependence test stationarity
test test
yt 10.73∗∗∗ 4.418 19.600∗∗∗
ent 10.97∗∗∗ 5.568 17.742∗∗∗
pt 11.93∗∗∗ 2.820 20.080∗∗∗
NOTES: All results in this table incorporate data from 1971 to 1995. IPS panel unit
root tests include both a constant and trend. Optimal lag length is selected from a
maximum of T1/3 = 3 by minimizing the AIC. Significance at ␣ = 0.01, 0.05, and 0.10
is denoted by ∗∗∗ , ∗∗ , and ∗ respectively.
Table 7
Westerlund (2007) panel cointegration test results.
Test Alternative hypothesis Test statistic
Gt Panel as a whole is cointegrated −2.990
Ga Panel as a whole is cointegrated −0.459
Pt At least one geographic location is cointegrated −1.892
Pa At least one geographic location is cointegrated −0.403
NOTES: Results in this table incorporate data from 1971 to 1995. Gt, Ga, Pt, and Pa
denote the version of the Westerlund (2007) panel cointegration test. Tests include
C&T. The lead and lag of the dependent variable in the testing equation is selected
from a maximum of 2 by minimizing the AIC. A maximum of 3 is not selected because
the panel did not have enough observations. Critical values are bootstrapped with
1000 replications. Significance at ␣ = 0.01, 0.05, and 0.10 is denoted by ∗∗∗ , ∗∗ , and ∗
respectively.
however the World Development Indicators (World Bank, 1998)
database only contains one CPI. The Series Names and Series Codes
have been added to the notes in Table 1 to facilitate any future repli-
cation studies. Figs. 1 through 3 plot each country’s income, energy
consumption, and prices (CPI), respectively.
Next, the Augmented Dickey-Fuller (ADF, Dickey and Fuller,
1981) and the Phillips-Perron (PP, Phillips and Perron, 1988) tests
for unit roots from Table 2 of the original study are replicated. Sev-
eral of the unit root test input specifications are included in the
notes to Table 2 from the original study. The critical values included
in said table indicate that only a constant (C) was included as the
deterministic component for all unit root tests. The optimal lag
length for the ADF unit root test was selected as that which min-
imized the AIC while the truncation lag for the PP unit root test
was selected as the longest significant lag in the autocorrelation
function (ACF) and partial ACF for the differenced () data. The
maximum lag length for the ADF unit root tests was not specified.
Tables 2 and 3 present the original study’s ADF unit root test and
PP unit root test results, respectively, in columns “Asafu-Adjaye
(2000)”. The columns titled ‘Replication Det = C’ present the repli-
cated results using the same input specifications as the original
study. The columns titled ‘Det = C&T’ incorporate all of the same
input specifications except correctly include both a constant and
trend (C&T) as deterministic components for the level data due to
an ocular inspection of Figs. 1 through 3.
From Tables 2 and 3 it is clear that neither the ADF unit root
test nor the PP unit root test could be replicated. For the sake of
completeness, the tests were repeated with a maximum lag length
from two through five,4 and we also tested the logarithms of the
data (results available upon request). We were unable to replicate
the tests statistics reported by Asafu-Adjaye (2000). This indicates
a negative replication of Type 1. The bolded text in Tables 2 and 3
highlight both the discrepancies in the test conclusions of our repli-
cation study and the original analysis.
4
Replication test conclusions were robust to the selection of the maximum lag
length with approximately 95% of the variable-country combinations agreeing for a
maximum lag length of two, three, four, and five.
Tables 2 and 3 suggest that within each country, income, energy
consumption, and prices are of different orders of integration. Since
cointegration analysis requires at least two series to be integrated
of the same order, the cointegration analysis reported by Asafu-
Adjaye (2000) cannot, and should not be replicated. There is no long
run relationship drawing the series together over time.
However, to conclude this section the Johansen (1988) and
Johansen and Juselius (1990) cointegration tests from Table 4 of
the original study are replicated. Asafu-Adjaye (2000) note that the
restricted constant version of the test was used for all four nations.
Table 4 presents the original study’s max test results in column
“Asafu-Adjaye (2000)”. The column titled ‘Replication Restricted
Constant’ present the replicated results using the same input spec-
ifications as the original study. The column titled ‘Replication
Unrestricted Constant’ incorporates the correct deterministic com-
ponents.
We were unable to replicate the max test results reported by
Asafu-Adjaye (2000) in Table 4. The replication with the unre-
stricted constant finds the trivariate system for only three of four
countries to be cointegrated. This reveals a second negative repli-
cation of Type 1; the original study found the trivariate system to
be cointegrated for all four countries.
3. Extension of original study
This section of the replication study extends the original study
in several directions. First we simulate the critical values for the
ADF and PP unit root tests for the sample under analysis. With
only 25 observations between 1971 and 1995, the use of asymp-
totic critical values in such a small sample is inappropriate. Perhaps
the series are all integrated of the same order when test statis-
tics are compared to their small sample critical values. We also
apply the efficient fractional DF unit root test (EFDF) of Lobato and
Velasco (2007) to allow for fractional integration under the alter-
native hypothesis and examine results from the generalized KPSS
(GKPSS) test for stationarity by Hobijn et al. (2004), simulating the
finite sample critical values for each test as in Sephton (2009) and
Sephton (2017). Table 5 presents these results as well as the ADF
and PP unit root test results from the original study. Using finite
sample critical values, the ADF and PP unit root tests fail to reject
the null hypothesis of a unit root for each variable at the 5% level of
significance. However, the results of the GKPSS test also fail to reject
the null hypothesis of stationarity for each variable, suggesting the
series might be fractionally integrated. The EFDF unit root tests do
not reject the null of a unit root at the 5% level of significance. It
would appear that the series within each nation might be integrated
of the same order when using small sample critical values, but the
GKPSS test results are at odds with this conclusion. The behavior of
the GKPSS test in such a small sample appears odd, so Table 5 also
presents the results of the original KPSS test (Kwiatkowski et al.,
1992), with simulated critical values. The original KPSS test rejects
the null of stationarity for all series in all countries.
Next, this replication study uses cross section dependence tests
by Pesaran (2004) to determine whether unit root and cointe-
gration tests should be conducted for individual countries or be
grouped into a panel. The Pesaran (2004) tests for dependence are
conducted in Stata using the command xtcd. Results displayed in
Table 6 reject the null hypothesis of cross section independence
for all three series with p-values being close to zero and we con-
tinue with panel time series methods. Two tests are conducted to
determine the order of integration of the panel. The IPS panel unit
root test by Im et al. (2003) which allows for cross sectional depen-
dence is used to test the null hypothesis that all panels have a unit
root against the alternative that some of the panels are stationary.
The residual-based Lagrange multiplier stationarity test by Hadri
 J. Mann and P. Sephton / Energy Economics 82 (2019) 78–84 83

Fig. 4. Panel VAR impulse response functions to a shock in y.

NOTES: Results depicted incorporate data from 1971 to 1995. The black line is the IRF for a one standard deviation shock in y for a panel VAR with three lags. The gray lines
are the 95% confidence interval bootstrapped using a non-parametric residual bootstrap algorithm with a temporal resampling scheme and 200 replications.

Fig. 5. Panel VAR impulse response functions to a shock in en.

NOTES: Results depicted incorporate data from 1971 to 1995. The black line is the IRF for a one standard deviation shock in en for a panel VAR with three lags. The gray
lines are the 95% confidence interval bootstrapped using a non-parametric residual bootstrap algorithm with a temporal resampling scheme and 200 replications.

Fig. 6. Panel VAR impulse response functions to a shock in p.

NOTES: Results depicted incorporate data from 1971 to 1995. The black line is the IRF for a one standard deviation shock in p for a panel VAR with three lags. The gray lines
are the 95% confidence interval bootstrapped using a non-parametric residual bootstrap algorithm with a temporal resampling scheme and 200 replications.

(2000) is used to test the null hypothesis of stationarity. This panel
stationarity test extends the univariate KPSS test of Kwiatkowski
et al. (1992) and is particularly well suited for panel datasets in
which T is large and N is moderate. Both the IPS panel unit root test
and the Hadri test for stationarity are conducted in Stata using the
command xtunitroot. Results displayed in Table 6 unanimously fail
to reject the null hypothesis of a unit root and reject the null hypoth-
esis of stationarity, satisfying a necessary requirement for the panel
cointegration tests of Westerlund (Persyn and Westerlund, 2008;
Westerlund, 2007).
There are four panel cointegration tests by Westerlund (2007)
that test the null hypothesis that each national trivariate system
is not cointegrated. In the same flavor as Banerjee et al. (1998),
none of the tests impose common factor restrictions. The asymp-
totic properties are derived by first taking T (number of time series)
to infinity, followed by N (number of geographic locations) which is
satisfactory for this application. Probability values are bootstrapped
following Westerlund (2007) to account for cross-sectional depen-
dence. The tests are conducted in Stata using xtwest (Persyn and
Westerlund, 2008). Results displayed in Table 7 unanimously fail to
reject the null hypothesis of no cointegration at the 5% level of sig-
nificance. Each national trivariate system is not cointegrated. This
result is a negative replication of Type 2.5
Given the finding of no cointegration, the final extension we
consider is a panel VAR model in the stationary first differences.
The model is estimated in Stata using xtvar. While the estimated
5
Table 7 incorporates data from 1971 to 1995. The findings are robust when
incorporating data from 1973 to 1995, revealing a negative replication of Type 2.
84 J. Mann and P. Sephton / Energy Economics 82 (2019) 78–84
model is not particularly informative on its own (results available
upon request), it does provide impulse response functions (IRF)
that demonstrate how a one standard deviation shock affects the
changes in each variable. These are contained in Figs. 4, 5, and 6. It is
interesting to note the sharp decrease in the IRF of en for a shock
in y in the first year after the shock, which recovers slightly in the
second year but does not fully recover even after four years. This
compares to a sharp increase in the IRF of y for a shock in en
that is statistically significant four and five years after the shock.
4. Conclusion
This replication study revealed negative replication of both
Type 1 and Type 2. The negative replication of Type 1 resulted
in the original study incorrectly performing cointegration analy-
sis despite the series not being integrated of the same order. Said
cointegration analysis was also fraught with a Type 1 error. This
replication study extends the original study’s time series tech-
niques by simulating the finite critical values for unit root and
stationarity tests. When comparing the test statistics to the sim-
ulated critical values all series now appear to be integrated of the
same order. The replication study also extends the original study’s
time series techniques to panel unit root and cointegration tests,
which improve on power properties of traditional cointegration
tests. Panel cointegration techniques disprove the finding of a long
run relationship between income, energy consumption, and prices
for India, Indonesia, Thailand, and the Philippines. This result is a
negative replication of Type 2.
Despite being published almost two decades ago, Asafu-Adjaye
(2000) continues to be cited in leading journals such as PLoS One,
Energy Economics, and Energy Policy. This negative replication inval-
idates the results from the original study and readers, especially
policy makers, are advised to disregard findings from the origi-
nal study. This replication study also provides a case study that
can be used to illustrate the implications of the inappropriate use
of asymptotic critical values that can be useful for teaching and
training applied econometricians who will make future policy rec-
ommendations.
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