Abstract
Long-term economic development is thought to necessitate the use of energy. To sustain steady economic growth, economies have increased their dependence on energy sources, tightened restrictions, and put pressure on energy supplies. Our paper employed simultaneous equations with GMM and SBM model to examine the impact of trade mechanism on energy efficiency of Asian countries within the Belt and Road Countries. We find significant increase in energy efficiency. After controlling the heterogeneous effects, the magnitude impact of the coefficient was noticeably which approves that the heterogeneity of countries and years influence the empirical findings of the model. Further, we find and validates that trade in the GVC mechanism helps to promote energy efficiency. Energy efficiency could be greatly promoted by emphasizing its significance in the age of GVC. Several policy recommendations support the findings
Highlights
Energy is seen as a necessity for long-term economic growth
To calculate the energy efficiency of the sampled countries, we used a simultaneous equation with Generalized Method of Moments (GMM) and slack-based model (SBM) model proposed by Huang et al (2014)
We first present descriptive statistics of the impact of Value added Tax on energy efficiency combined with Research and Development of Asian Countries under Belt and Road
Summary
Energy is seen as a necessity for long-term economic growth. Economies have expanded their reliance on energy sources to maintain steady economic growth, tighten limitations, and put pressure on energy supply (Xu and Lin, 2018). Researchers come to the conclusion that trade is a process that reduces carbon emissions by exposing people to environmentally friendly technologies (Yasmeen et al, 2018; Yao et al, 2019; Yasmeen et al, 2019; Shah et al, 2019). Countries with a high GVC are more energy efficient and can produce products with less inputs of energy, resulting in lower emissions. We calculate the impact of VAT on energy efficiency based on the findings of the study (Yao et al, 2020). Our paper contributes to the extant literature in twofold: First, our paper adds to the ongoing debate about how Global Value Chain impacts energy efficiency by presenting new evidence from Asian culture where China and India are leaders of trade. The analysis comes to a close in the final segment
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