The impact of digitalisation on energy consumption : the case of a small island economy

The aim of the study is to investigate the impact of digitalisation on energy consumption for the small island economy of Mauritius. The study is done for the period 1990 to 2019. For this purpose, the vector error correction model has been used followed by a threshold regression analysis. The results confirm the rebound effect of digitalization whereby a positive relationship was found between digitalization and electricity consumption. Similar result was found for economic growth, participation in global value chain, financial development and higher industrial intensity. The threshold regression analysis showed that the increase in electricity consumption as a result of a rise in digitalisation was greater between the period 1990-1995 as compared to 1996 and onwards explained by the adoption of more efficient technologies and increased use of renewable energies. [Publisher's text]