The aim of this study is to investigate the existence and direction of the Granger causality between growth domestic product, exports, and energy consumption in South Korea and Taiwan for the period of 1971-2013. The examination conclusion evidenced that there are significant bi-directional relationship among the three economic variables for South Korea, bi-directional causality between GDP and exports, bi-directional causality between GDP and energy consumption, and bi-directional causality between exports and energy consumption, while bi-directional causal relationship between exports and energy consumption, and uni-directional causality relationship running from exports to GDP was founded for the economic variables of Taiwan. South Korea and Taiwan has shown similar economic growth progress over the decades, and they are using similar economic growth strategy which is export-push strategy. However, the causal relationship among those economic variables has shown different result for South Korea and Taiwan. The empirical results indicate that each country should have different policy as they have different economic situation. As limiting energy consumption will negatively affects other economic variables, both governments should not consider energy conservation policy. Rather, supporting of energy efficiency policy is highly recommended for both South Korea and Taiwan.
Keywords: GDP, Exports, Energy Consumption, Granger Causality Test, Korea, Taiwan.
