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Nonlinear relationship between digitization and energy efficiency: Evidence from transnational panel data

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  • Lin, Boqiang
  • Huang, Chenchen

Abstract

Improving energy efficiency is crucial for reducing energy consumption and carbon emissions. Energy efficiency is thought to be greatly improved by digital technology. Investigating the connection between digitalization and energy efficiency can offer a valuable reference for the worldwide achievement of the carbon neutrality goal. To analyze this relationship, this paper constructed a digital evaluation index system and collected data from 90 countries between 2000 and 2020. The findings of the two-way fixed effect panel model indicate that there is an inverted U-shaped relationship between digitization and energy intensity. The conclusion is still valid after using the two-stage least square method, the generalized method of moments, and a series of robustness tests. When the digitization level reaches 0.4324, digitization can improve energy efficiency and play an energy-saving role. According to the results of the heterogeneity analysis, developed countries have already reached the stage where digitalization can improve energy efficiency while developing countries have not yet reached this stage. Moreover, no heterogeneity effect caused by the energy mix and electrification level was observed. This study clarifies the causal relationship between digitalization and energy efficiency and provides factual support for digital and decarbonization transitions.

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  • Lin, Boqiang & Huang, Chenchen, 2023. "Nonlinear relationship between digitization and energy efficiency: Evidence from transnational panel data," Energy, Elsevier, vol. 276(C).
    • Handle: RePEc:eee:energy:v:276:y:2023:i:c:s0360544223009957
    DOI: 10.1016/j.energy.2023.127601
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