Dynamics of Digitalization and Energy Efficiency in Developing Countries: An Empirical Analysis
DOI:
https://doi.org/10.59926/jodprp.vol08/01Keywords:
Digitalization, Energy efficiency, Environmental efficiency, Carbon emissions efficiency, Renewable energy consumption, Developing countries, Generalized Method of MomentsAbstract
This study examines the impact of digitalization on energy and environmental efficiency in developing countries using panel data from 2010 to 2020. Energy efficiency is measured using energy intensity per unit of output while environmental efficiency is measured using CO2 emissions per economic output. The estimates of the two-step system Generalized Method of Moments (GMM) reveal that all proxies of digitalization except telephone subscription show a negative effect on energy intensity, leading to enhanced energy efficiency. The research finds significant differences in the effect of digitalization on energy intensity and carbon emission intensity indicating that although developing countries have gained significant benefits of the digitalization process in terms of achieving environmental efficiency, they require focused actions in terms of improving energy efficiency and achieving sustainable development goals. The findings of the research provide valuable insights regarding the promotion of digital transformation particularly in the energy sector in the developing countries where they lack in accelerating the effect of the digitalization process.
JEL Code: O13; O31; O33; P18; P28; P33; Q21
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