Impact of technological innovation on energy efficiency in industry 4.0 era: Moderation of shadow economy in sustainable development

Abstract

Despite the ongoing research on energy efficiency and innovation in the context of Industry 4.0, little is known on how degree of leakages in economy can impact the energy efficiency-innovation association. This issue has been addressed by the United Nations in their Sustainable Development Goals (SDG) report also. In the era of Industry 4.0, this issue can be crucial from the perspective of sustainable development, and we are analyzing this issue in case of Middle East and North African (MENA) countries over a period of 1990–2016. The second generation methodological approaches have been adopted. Our results show that technological innovation has a positive impact on energy efficiency, whereas growth in shadow economy has a detrimental impact on energy efficiency. The structural transformation of economy has positive impact on energy efficiency. Based on our results, we have designed an SDG framework, which might help the MENA countries to achieve the objectives of SDG 7, SDG 8, SDG 9, and SDG 4.