Energy dependence, industrial structure, and growth in the EU

This research examines how industrial structure influences the relationship between energy security and economic growth within the European Union. The analysis is based on Eurostat data for EU member states covering the period from 2000 to 2024. To explore these relationships, the study employs two-way fixed-effects regression and System GMM estimation, while using cluster analysis to group countries based on their structural characteristics. The results indicate that the impact of energy security on growth depends on a country's industrial structure: a larger industrial share can mitigate the adverse growth consequences of energy dependence. Investments show a positive and stable relationship with growth, whereas the impact of inflation is negative. The roles of trade openness and renewable energy are more moderate and less robust. The cluster analysis identifies three groups of countries that differ in terms of growth performance, energy dependence, and economic openness. The findings emphasize that efforts to reduce energy dependence and transition to a cleaner energy system should be supported by policies tailored to the specific industrial characteristics of individual member states. From a policy perspective, the findings support differentiated measures tailored to Member States’ industrial structures and levels of energy dependence. Energy diversification should therefore be combined with policies that strengthen energy efficiency, investment, and industrial adaptability.