The positive impact of trade openness on consumption of energy: Fresh evidence from Andean community countries

The impact of trade openness on consumption of energy was investigated for a panel of four Andean community countries, over a period of forty-three years (from 1971 to 2014). The Arellano-Bond dynamic GMM model was used as method to realization of this investigation. The results demonstrate that the economic growth and trade openness have a positive effect on energy consumption, while the financial openness exerts a negative effect. These findings suggest that more energy conservations policies should be devised to reduce the consumption of energy by households and industries. Moreover, it is necessary more liberalization and deregulation policies that incentive the trade and economy liberalization with the intention of bring more investments in energy efficiency technologies, and access to products with high energy efficiency that reduces the consumption of energy from fossil fuels and the environmental degradation.