Spatial spillover effects of technological innovation on total factor energy efficiency: taking government environment regulations into account for three continents

PurposeThe discussion on energy efficiency has been increasing due to the increasing population, emissions of degradable and harmful pollutants, and clean energy substitutes are being developed in order to manage and control the energy requirements all over the world. Against this backdrop, the factors of technological innovation and environmental regulations have been determined as key indicators for the evaluation of sustainable developments and practices in the energy efficiency evaluation studies.Design/methodology/approachA two-stage analysis process has been configured for evaluation of the energy efficiency. The first stage includes the estimation of the Total factor energy efficiency scores using the data envelopment Multiplier input-oriented methodology, while the second stage includes the exploration of the impact of technological innovation and government environmental regulations on the Total factor energy efficiency scores obtained in the first step through the application of a spatial regression model.FindingsThis paper highlights the link between the need for and impact of energy efficiency innovations and shows that the energy efficiency goal can be fulfilled by incorporating laws on sustainability and incorporating strict regulations that allow for the use of clean energy, low carbon energy technologies.Originality/valueThe present study, furthermore, provides evidence from 15 countries, five from three different continents, i.e. Asia, Europe and Africa so that a cross-country performance of these factors can be evaluated. The main contribution of the present study is the evaluation of the technological innovation on energy efficiency. There have been studies evaluating various factors on the development of energy-efficient practices; however, the focus on the role of technological innovation and governmental regulations has been scarce.