A Survey of the Relationship between Foreign Direct Investment, Clean Energy, Trade Liberalization, Economic Growth with Energy Demand in Iran

Energy is one of the most important inputs for development and production. Trying to efficient use of energy in all the advanced countries of the world is the most important factor for sustainable industrial development. Determine the relationship between economic growth, foreign direct investment and trade liberalization in the energy, not only considerable political implications, but it is essential to achieve sustainable development goals.The present study investigated how foreign direct investment, clean energy, trade liberalization, economic growth are related to energy demand in Iran over 1976-2012. Autoregressive Distributed Lag Model (ARDL) and Vector Error Correction Model were used to determine long-term relationships. Empirical results indicated that foreign direct investment, trade liberalization, CO emissions, and economic growth are directly correlated with energy demand. In addition, the results from Vector Error Correction Model indicated the slow trend of adjustment towards equilibrium.