Dynamics of Digitalisation and Energy Efficiency in Developing Countries: An Empirical Analysis

This study examines the impact of digitalisation on energy and environmental efficiency in developing countries using panel data from 2010 to 2020. Energy efficiency is measured by Energy Intensity per unit of output, while Environmental Efficiency is assessed through CO₂ emissions per economic output. The two-step system Generalised Method of Moments (GMM) estimates reveal that all proxies of digitalisation, except telephone subscriptions, have a negative effect on energy intensity, leading to improved energy efficiency. The findings indicate a distinct difference in the impact of digitalisation on energy intensity and carbon emission intensity. While developing countries benefit from digitalisation in achieving environmental efficiency, they still require targeted efforts to enhance energy efficiency and achieve the United Nations Sustainable Development Goals. This study provides valuable insights into promoting digital transformation, particularly in the energy sector, where developing countries face challenges in accelerating the impact of digitalisation.