An Investigation of the Threshold Effect of Energy Consumption on Economic Growth in OPEC Members Countries

The present study investigates the impact of energy consumption on economic growth with emphasis non-fuel export for OPEC Members Countries over the period 1995-2012. For this purpose, the paper uses the Panel Smooth Transition Regression (PSTR) model. The estimation results of model reject the linearity hypothesis, and estimate a continuous transition function with two regimes that gives a threshold at energy consumption of 21374.28 kilo tone of oil equivalent for under review countries. Moreover the study results indicate that energy consumption, investment, labor force and non-fuel export have positive impact on economic growth in these countries. The results indicate that the energy consumption will have positive effect on economic growth until the quantity of energy consumption not be more than the calculated threshold value. Thus, the programming of policies in order to reduction of energy consumption and increasing economic growth are necessary.