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Does energy aid improve energy efficiency in developing countries?

Author

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  • Admasu Asfaw Maruta

    (University of South Australia)

  • Rajabrata Banerjee

    (University of South Australia)

Abstract

The study examines the effect of energy aid on the energy efficiency of 70 developing countries in the period 1990–2016. We consider two-stage least squares identification strategy to examine the energy aid-energy efficiency nexus empirically. Energy aid is instrumented by similar voting preferences between donors and recipient countries in the United Nations General Assembly. Our finding suggests that energy aid has a significant positive effect on the energy efficiency of aid recipient countries. The result is robust with different sensitivity checks, such as using alternative measures of energy efficiency, alternative measures of energy aid, alternative estimation methods, and dropping outliers.

Suggested Citation

  • Admasu Asfaw Maruta & Rajabrata Banerjee, 2021. "Does energy aid improve energy efficiency in developing countries?," Empirical Economics, Springer, vol. 61(1), pages 355-388, July.
    • Handle: RePEc:spr:empeco:v:61:y:2021:i:1:d:10.1007_s00181-020-01854-y
    DOI: 10.1007/s00181-020-01854-y
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    Cited by:

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    2. Wang, Shanyong & Wang, Jing & Wang, Wenfu, 2023. "Do geopolitical risks facilitate the global energy transition? Evidence from 39 countries in the world," Resources Policy, Elsevier, vol. 85(PB).

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    More about this item

    Keywords

    Foreign aid; Energy; Political affinity; Developing countries;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P4 - Political Economy and Comparative Economic Systems - - Other Economic Systems

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