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Energy Abundance, Trade and Industry Location / Reyer Gerlagh and Nicole A. Mathys. FEEM, 2011, 31 p. (Note di lavoro ; 2011.003)http://www.feem.it/userfiles/attach/20111171430134NDL2011-003.pdfWe study the effect of countries’ energy abundance on trade and sector  activity, conditional on sector’s energy intensity, using an unbalanced  panel with 14 high-income countries from Europe, America and Asia, 10  broad sectors, and years 1970-1997. We find that (i) countries with  large energy endowments have low energy prices, and are thus energy  abundant both on micro and macro level. (ii) Energy abundant countries  have a high level of energy embodied in exports relative to imports.  (iii) Energy intensive sectors export from and (iv) have higher economic  activity in energy abundant countries. (v) The trade and location  effects increase with a sector’s exposure to international trade. In  short, energy is a major driver for sector location through  specialisation. We show that capital and energy are complements in the  production function and use various controls in our analysis. The  results give insights into delocalisation effects that may take place  among rich countries with heterogeneous energy policy. (© FEEM)