Is innovative technology a solution to Japan's long-run energy insecurity? Dynamic evidence from the linear and nonlinear methods

Abstract

Energy insecurity [i.e., high energy security risk (ESR)] has been a persistent issue even for some developed countries and can eventually become a hindrance to their sustainable development. Moreover, while one of the ways to achieve sustainable development is to combat ESR, dealing with ESR is not a simple task because ESR itself is a complex concept and requires an innovative approach. One of the countries with the base for such an innovative approach is Japan. Japan is among the most technologically innovative countries in the world; Japan also has a high level of energy insecurity. In this respect, the main goal of this research is to examine how technological innovation (TI) in Japan impacted its energy security risk (ESR) in the long-run by utilizing the recently developed augmented linear and nonlinear autoregressive distributed lag (ARDL) methods for the 1983–2018 period. The results revealed that TI curbs Japan's ESR; however, technological stagnation worsens Japan's ESR in the long-run. Additional results also demonstrated that renewable energy production limits Japan's long-run ESR, yet financial development intensifies it. The findings show that TI can induce positive spillover effects, and TI should become an integral part of Japan's energy policies in combating its long-run energy insecurity issues.