Is the digital economy an effective tool for decreasing energy vulnerability? A global case

Abstract

Energy vulnerability is gaining attention in light of global economic, social, and political conflicts. The digital economy has the potential to become a vital tool in addressing current issues. This paper explores the relationship, mechanisms, and heterogeneity between the digital economy and energy vulnerability for 110 economies by using a generalized method of moments (GMM) model. Our key findings are as follows: (1) The digital economy effectively reduces energy vulnerability, with digital infrastructure and social impact as the main contributors to this effect. (2) The digital economy helps upgrade the industrial structure and the level of financial development, thereby reducing energy vulnerability. (3) Heterogeneity results show that the negative impact of the digital economy on energy vulnerability is more significant in regions with higher income levels, particularly Europe and North America. (4) The level of economic development acts as a practical threshold variable, with the digital economy having a more pronounced negative impact on energy vulnerability at higher threshold levels. These findings provide new development ideas for improving global energy security and energy efficiency, and reducing energy vulnerability.