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The impact of R&D on energy consumption: Evidence from nonlinear semi-parametric estimations for selected OECD countries

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  • Le, Ha Chi
  • Bhattacharya, Mita
  • Smyth, Russell
  • Zhang, Xibin

Abstract

We investigate the influence of energy-related research and development (R&D) on primary energy consumption across 16 OECD countries within a semi-parametric framework spanning the period 1980-2021. In doing so, we propose a novel method for introducing an instrumental variable into the local linear dummy variable estimation method to address endogeneity issues. Our results indicate a significant impact of energy-related R&D on energy consumption, attributed to improved energy productivity, the advancement of clean energy technologies, and heightened energy efficiency. This study contributes to existing literature by illustrating the dynamic and multifaceted nature of the relationship, emphasizing that technological innovation in the energy sector plays a pivotal role in reducing overall energy consumption. The insights from our analysis offer valuable guidance for policymakers committed to fostering sustainable energy innovation and development.

Suggested Citation

  • Le, Ha Chi & Bhattacharya, Mita & Smyth, Russell & Zhang, Xibin, 2025. "The impact of R&D on energy consumption: Evidence from nonlinear semi-parametric estimations for selected OECD countries," Energy Economics, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325005353
    DOI: 10.1016/j.eneco.2025.108708
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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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