Foreign direct investment and Renewable energy developmentin sub-Saharan Africa: Does governance quality matter?

Marcel Dossou (), Emmanuelle Kambaye (), Simplice Asongu, Alastaire Alinsato, Mesfin Berhe () and Kouessi Dossou ()
Additional contact information
Marcel Dossou: University of Abomey-Calavi, Benin
Emmanuelle Kambaye: Chengdu, China
Alastaire Alinsato: University of Abomey-Calavi, Benin
Mesfin Berhe: Chengdu, China
Kouessi Dossou: University of Abomey-Calavi, Benin

No 23/061, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: Existing studies have been separated, considering the foreign direct investment (FDI) and renewable energy development (RE) nexus and the governance quality- renewable energy development relationship. However, the study regarding the moderation of governance quality on the FDI-renewable energy nexus is quite scarce. To fill the gap in the literature, the study therefore examines the moderation of governance quality on the influence of FDI on (RE) in 37 sub-Saharan African economies over the period 1996-2020. To achieve this goal, the panel corrected standard errors (PCSE) estimation technique has been adopted. The results show that FDI has a positive and significant effect on RE, meaning that an increase in foreign direct investment could lead to a 0.05 increase in RE. Moreover, the results unveil that governance quality is positively and significantly associated with RE. This means that a unit increase in control of corruption, governance effectiveness, rule of law, and voice and accountability leads to a 9.64, 9.10, 10.10 and 9.08 increase unit in the renewable energy sector, respectively. Most importantly, the results indicate that the interaction between FDI and governance quality has a positive and significant effect on RE. Policy implications are discussed based on the findings revealed by this study.

Keywords: Gender political inclusion; democracy; environmental performance; regression quantile method of moments; Africa (search for similar items in EconPapers)
Pages: 37
Date: 2023-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-int
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Citations: View citations in EconPapers (5)

Forthcoming: Renewable Energy

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http://www.afridev.org/RePEc/agd/agd-wpaper/Foreig ... b-Saharan-Africa.pdf Revised version, 2023 (application/pdf)

Related works:
Journal Article: Foreign direct investment and renewable energy development in sub-saharan Africa: Does governance quality matter? (2023)
Working Paper: Foreign direct investment and Renewable energy developmentin sub-Saharan Africa: Does governance quality matter? (2023)
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