The impact of domestic R&D and North–South R&D spillovers on energy intensity in developing countries

Abstract

This study utilizes panel data between 1995 and 2015 for a cross section of 33 developing (low- and middle-income) countries to investigate the impact on domestic energy intensity both of domestic R&D and of possible spillovers from foreign R&D conducted in developed (high-income) countries. More specifically, it examines R&D spillovers from developed countries (North) to domestic energy intensity in developing countries (South) through disembodied channels, total goods imports, and imports of machinery and equipment. Our main findings, based on panel cointegration techniques, are as follows: First, domestic R&D in the long run does not contribute to reductions in energy intensity in developing countries; second, there is no evidence to suggest that disembodied North–South R&D spillovers affect the long-run level of domestic energy intensity; third, there are nevertheless significant spillovers from R&D conducted in industrial countries that reduce energy intensity in developing countries; and fourth, while many imported goods are not a channel for North–South R&D spillovers, such spillovers are transmitted through imports of machinery and equipment.