Nonlinear Effects of Transportation Infrastructure on Industrial Energy Efficiency in Iranian Provinces

Abstract

The aim of this study is to analyze the effect of transportation infrastructure on the energy efficiency of the industry in the provinces of Iran. The rapid growth of industries in the world during the last few years has led to an increase in energy consumption and carbon dioxide emissions. Energy efficiency contribute to economic growth, energy security, reduction of greenhouse gases, and energy sustainability. One of the factors affecting energy efficiency is transportation infrastructure, which, as the main capital of social development, can affect energy efficiency through various mechanisms. These infrastructures can have different effects on energy efficiency from the channels of the economy of scale, the effect of technology spillover and other external factors, and the effect of competition between production enterprises. We apply a panel threshold model to approximate the threshold effect of transportation infrastructure on industrial energy efficiency using data of 31 provinces of Iran from 2006 to 2019. The results showed that the transportation infrastructures have a non-linear effect on energy efficiency so that when the logarithm of real GDP is higher than the second threshold (15/66), transportation infrastructures significantly improve energy efficiency, and when the logarithm of GDP is lower than the first threshold (14/64), the expansion of this type of infrastructure reduces the energy efficiency of the industry, and between the two thresholds of transportation infrastructure, it does not affect the energy efficiency of the industry. In addition, technological progress and energy prices also have a positive and, significant effect on industrial energy efficiency.

Keywords

• energy efficiency
• transportation infrastructure
• panel threshold model
• advancement of technology