Global value chains and energy security: Evidence from global sample

Abstract

Our paper is the first attempt to examine the non-linear relationship between global value chains (GVC) participation and energy security performance (ESP). This article utilizes seven indicators to reflect four aspects of energy security, including availability, acceptability, develop-ability, and sustainability. By applying diverse econometric techniques to a global sample of 26 low-income & lower-middle-income (LI&LMICs) and 24 upper-middle-income (UMICs) and 35 high-income (HICs) during the 2000–2018 period, our estimates reveal critical findings. We confirm the existence of the nonlinear association between GVC participation and non-fossil energy consumption, energy intensity, energy consumption, CO2 emissions, and renewable energy consumption. The results suggest that the GVC involvement is beneficiary for the acceptability, develop-ability, and sustainability of the energy system after GVC values reach a certain threshold. Furthermore, there is evidence on the long-term cointegration between GVC and ESP and our results confirm its effects in the long term. Notably, there are stark contrasts in the impact of GVC on the ESP in the subsamples by income levels, and the presence of a nonlinear relationship between GVC and ESP is more likely to be evident in high-income countries. Similar findings are found when we reexamine the effects of backward and forward GVC participation on the ESP.