How does digital economy affect energy poverty? Analysis from the global perspective

Abstract

As an emerging engine of economy development, the potential impact of digital economy on energy poverty are worth to explore for alleviation. Using a balanced panel dataset of 61 countries, this study empirically examined the impact of digital economy on energy poverty and relative transmission mechanisms. Specifically, we first assess the digital economy and energy poverty level across the globe, and then explore whether the development of digital economy can help alleviate energy poverty. The heterogeneity and mediating roles in the digital economy-energy poverty nexus are also discussed. We conclude that: (1) Global energy poverty index shows a decreasing trend, and global digital economy index shows an increasing trend during the sample period. (2) There is a negative relationship between the digital economy and energy poverty, demonstrating that the development of the digital economy has a positive impact on energy poverty alleviation. In addition, the heterogeneity test results demonstrated that positive alleviation impacts exist in high-income countries, whereas middle-income countries experience negative impacts, and heterogeneities also exist in different regions. (3) The analysis of the mediation effects showed that government governance, economic growth, and urban development mediate the nexus of the digital economy on energy poverty. Based on the above findings, this study proposes several policy implications to reduce energy poverty.