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Assessing the impact of technological innovation on technically derived energy efficiency: a multivariate co-integration analysis of the agricultural sector in South Asia

Author

Listed:
  • Dilawar Khan

    (Kohat University of Science and Technology)

  • Muhammad Nouman

    (Kohat University of Science and Technology)

  • Arif Ullah

    (University of Education, Lahore)

Abstract

The increased demand for energy in agriculture raised the cost of production and hence caused greenhouse gas emissions. Therefore, improving energy efficiency is essential to decrease energy demand and, consequently, reduce costs and reduce greenhouse gas emissions. The objective of this study was to compute energy efficiency and assess the influence of technological innovation on technically computed energy efficiency of the agricultural sector in South Asia. A two-stage analysis was carried out using panel data over the period 2002–2019. First, energy efficiency was computed employing the stochastic frontier analysis (SFA) approach. Second, the influence of technological innovation on technically derived energy efficiency was examined employing a system generalized method of moments (GMM) approach. Findings of the SFA approach show that the average energy efficiency of the South Asian agricultural sector was 84%, ranging from 79 to 86%, showing that there is still 16% room for improvements in energy efficiency of the agriculture in South Asia. In addition, this study found that India has relatively high energy efficiency (86%) compared to other countries in South Asia. The study also found that energy efficiency shows a slight upward trend in the agricultural sector in South Asia. The findings of the system GMM revealed that technological innovation is playing a significant role in improving energy efficiency of the agricultural sector in South Asia. Based on our findings, South Asia can reduce energy inefficiency by spending more on research and development (R&D) in the agricultural sector.

Suggested Citation

  • Dilawar Khan & Muhammad Nouman & Arif Ullah, 2023. "Assessing the impact of technological innovation on technically derived energy efficiency: a multivariate co-integration analysis of the agricultural sector in South Asia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(4), pages 3723-3745, April.
    • Handle: RePEc:spr:endesu:v:25:y:2023:i:4:d:10.1007_s10668-022-02194-w
    DOI: 10.1007/s10668-022-02194-w
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