Does The Level Of Institutional Quality Matters In Promoting Energy Efficiency? Evidence Of Belt And Road Initiative Countries

This study investigates the threshold effect of institutional quality in determining energy efficiency. The panel data over the period of 2000 to 2019 based on four-year averaged data for the selected 85 Belt Road Initiatives (BRI) countries were adopted; utilizing the dynamic threshold regression by Seo & Shin (2016) and Seo et al. (2019). The findings suggest that when institutional quality exceed the threshold level (i.e., at the higher regime), an increase in institutional quality promotes energy efficiency (i.e., lower energy intensity). However, when the institutional quality is below the threshold level (i.e., at the lower regime), an increase in institutional quality impedes energy efficiency (i.e., higher energy intensity). Hence, the focus in outlining the energy efficiency policies and initiatives should be directed to altering long term behaviour.

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