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The Impact of ICT Investment on Energy Use: A Comparative Study Between South Korea and Japan

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ICT Investment for Energy Use in the Industrial Sectors

Part of the book series: Lecture Notes in Energy ((LNEN,volume 59))

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Abstract

This chapter examines substitute/complementary relationships in the demands for ICT capital, non-ICT capital, energy, materials, and labor in the industrial sectors in Japan and South Korea during 1973–2006 and 1980–2009, respectively. In doing so a dynamic factor demand model is applied to link inter-temporal production decisions by explicitly recognizing that the level of certain factors of production (refer to as quasi-fixed factors: ICT and non-ICT capital) cannot be changed without incurring so-called adjustment costs, defined in terms of forgone output from current production. Special emphasis is on the effects of ICT investment on energy use through the substitute/complementary relationships. This chapter quantifies how ICT capital investment in South Korea and Japan affects industrial energy demand. It is found that ICT and non-ICT capital investment serve as substitutes for the inputs of labor and energy use. The results also demonstrate a significant cost differences across industries in both countries.

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Notes

  1. 1.

    The materials input price is considered as numeraire.

  2. 2.

    The aim is to reflect the structural changes in the Korean economy due to the implementation of economic development plan explained in Chap. 2.

  3. 3.

    The estimated coefficients for the industries’ dummy variables are not reported to save space.

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Authors and Affiliations

  1. SMC University, Zurich, Switzerland

    Nabaz T. Khayyat

  2. Seoul National University, Seoul, Korea (Republic of)

    Nabaz T. Khayyat

  3. Computer Science and Engineering Department, University of Kurdistan Halwer, Erbil, Iraq

    Nabaz T. Khayyat

  4. School of Business Management, University of Liverpool, Liverpool, UK

    Nabaz T. Khayyat

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Khayyat, N.T. (2017). The Impact of ICT Investment on Energy Use: A Comparative Study Between South Korea and Japan. In: ICT Investment for Energy Use in the Industrial Sectors. Lecture Notes in Energy, vol 59. Springer, Singapore. https://doi.org/10.1007/978-981-10-4756-5_6

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  • DOI: https://doi.org/10.1007/978-981-10-4756-5_6

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