Effect of China 's technology spillovers on energy intensity in Africa

Empirical studies on the effects of China–African economic relations on energy intensity in Africa are scarce.To fill the gap in the literature, this study investigates the technology spillover effects of the China – Africa trade and investment relations on energy intensity. It uses both linear and nonlinear dynamic panel estimation methods for 42 African countries from 2003 to 2015. The results show that China’s technology spillover through imports significantly reduces energy intensity in Africa. The findings are consistent across specifications and sample groups. Moreover, the technology spillover coming from foreign direct investment(FDI) improves energy intensity, particularly in lower-middle-income African countries. The dynamic threshold estimation results show that countries’ absorptive ability is important for technology spillover effects of FDI and imports on energy intensity. The results suggest that countries’ absorptive capacity should be increased to maximize the benefits of trade and investment technology spillovers.