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Estimating Persistent and Transient Energy Efficiency in Belt and Road Countries: A Stochastic Frontier Analysis

Huaping Sun (), Bless Kofi Edziah (), Xiaoqian Song (), Anthony Kwaku Kporsu () and Farhad Taghizadeh-Hesary ()
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Huaping Sun: Institute of Industrial Economics, Jiangsu University, Zhenjiang 212013, China
Bless Kofi Edziah: Institute of Industrial Economics, Jiangsu University, Zhenjiang 212013, China
Xiaoqian Song: China Institute of Urban Governance, School of International and Public Affairs, Shanghai Jiao Tong University, Shanghai 200030, China
Anthony Kwaku Kporsu: Institute of Industrial Economics, Jiangsu University, Zhenjiang 212013, China

Energies, 2020, vol. 13, issue 15, 1-1

Abstract: In this paper, we examine the energy efficiency performance of the Belt and Road Initiative (BRI) countries using a newly developed panel data stochastic frontier model that allows for estimation of both persistent and transient efficiency while controlling for random country effects and noise. By this, we contribute to the energy economic literature by providing a complete picture of the level of persistent, transient, and total energy efficiency estimates from a cross country perspective for a panel of 48 BRI countries during the period 1990–2015. Adding that there is little evidence to support energy efficiency convergence in the energy economic literature, we went further to check whether energy efficiency converges in the BRI countries. The results show that (1) persistent efficiencies are much lower than transient efficiencies, suggesting that the energy problem in the BRI countries is more of a structural issue; (2) while energy efficiency varies widely across the countries, high-income countries perform better than the lower-income countries; (3) there is evidence of efficiency convergence and it accelerates when trade increases, but decreases when the industrial sector increases. Based on these findings, we propose some policy implications.

Keywords: BRI; energy efficiency; transient efficiency; persistent efficiency; efficiency convergence (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
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