Energy intensity convergence in Belt and Road Initiative (BRI) countries: What role does China-BRI trade play?

Aimed at enhancing economic prosperity through unimpeded trade, the Belt and Road Initiative (BRI) is controversial as large-scale infrastructure construction may accelerate energy consumption and deteriorate environment of BRI countries. Against this background, from the perspective of energy intensity gap evolution of BRI countries, this paper combines the panel smooth transition model with beta-convergence model to investigate the role of China-BRI trade in energy intensity convergence of 59 BRI countries during 1996-2015, including the trade scale effect, technology effect and composite effect, as well as the tempo-spatial differences of energy intensity convergence rates. The empirical results show that, first, in the premise of reducing energy intensity, the scale of China-BRI trade facilitates energy intensity convergence rate by about 13% of BRI countries when exceeding the trade threshold value. Second, the technology effect accelerates the energy intensity convergence rate in the context of reducing energy intensity; in particular, the high-skill and low-medium skill technology spillover effect increase the energy intensity convergence rate by 12% and 15%, respectively. Third, the composite effect appears insignificant on the energy intensity convergence of BRI countries. Finally, BRI countries with larger bilateral trade scale or more shares of technology-intensive imports with China tend to have greater energy intensity convergence rates than other counterparts. (C) 2019 Elsevier Ltd. All rights reserved.