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

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

Energy Economics, 2025, vol. 149, issue C

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.

Keywords: Energy consumption; Innovation; Instrument variable; Research and development; Time-varying panel data model (search for similar items in EconPapers)
JEL-codes: C33 O13 Q40 Q48 Q55 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325005353

DOI: 10.1016/j.eneco.2025.108708

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