Politická ekonomie X:X | DOI: 10.18267/j.polek.1538

How Do International Trade Gains Affect Energy Prices? Evidence from the OECD Economies

Wenchao Pan ORCID..., Hemachandra Padhan ORCID..., Sujit Kumar Pruseth ORCID..., Santosh Kumar Sahu ORCID..., Umakant Dash ORCID..., Giray Gozgor ORCID...
Wenchao Pan, Hunan University of Science and Engineering, Yongzhou, China
Hemachandra Padhan (corresponding author), Indian Institute of Management, Sambalpur, India
Sujit Kumar Pruseth, Indian Institute of Management, Sambalpur, India
Santosh Kumar Sahu, Department of Humanities and Social Sciences, Indian Institute of Technology, Madras, India
Umakant Dash, Institute of Rural Management Anand, Gujarat, India
Giray Gozgor (corresponding author), University of Bradford, Bradford, United Kingdom

This paper examines the influence of international trade gains (measured by the International Trade Potential Index) on real energy prices using panel data from 28 OECD economies from 1995 to 2015. The empirical models also control the role of gross domestic product per capita and total population. The paper utilises the Dynamic Common Correlated Effects, Cross-sectionally Augmented Distributed Lag and the Augmented Mean Group estimations. The findings suggest that higher gains from international trade are associated with increased energy prices. The evidence is critical because policymakers should understand the trade-offs between promoting international trade and managing energy costs. Since trade boosts drive up energy prices, governments should implement measures to mitigate the impact on consumers and industries, such as energy efficiency programs or investments in alternative energy sources.

Keywords: energy prices, international trade gains, international trade potential index, OECD countries, CS-ARDL estimations, augmented mean group estimations

Received: May 31, 2025; Revised: August 23, 2025; Accepted: October 13, 2025; Prepublished online: April 4, 2026 

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