Does energy aid improve energy efficiency in developing countries?

Admasu Asfaw Maruta () and Rajabrata Banerjee
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Admasu Asfaw Maruta: University of South Australia

Empirical Economics, 2021, vol. 61, issue 1, No 14, 355-388

Abstract: 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.

Keywords: Foreign aid; Energy; Political affinity; Developing countries (search for similar items in EconPapers)
JEL-codes: O13 P4 Q4 Q43 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s00181-020-01854-y

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