Revisiting the Relation between Renewable Electricity and Economic Growth: A Renewable–Growth Hypothesis

Minyoung Yang and Jinsoo Kim
Additional contact information
Minyoung Yang: Department of Earth Resources and Environmental Engineering, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul 04763, Korea
Jinsoo Kim: Department of Earth Resources and Environmental Engineering, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul 04763, Korea

Sustainability, 2020, vol. 12, issue 8, 1-22

Abstract: Global concern about the climate crisis has incited movements for switching to renewable electricity. Renewable electricity can contribute to economic growth as an input factor (electricity generation) and also as an industry (renewable manufacturing). We introduce a new hypothesis, the renewable–growth hypothesis, to investigate the role of the renewable manufacturing industry in the energy–growth nexus study. To test the hypothesis, we select a target country group using the market share of the renewable manufacturing industry and conduct the Granger causality test for solar photovoltaic and wind power. The autoregressive distributed lag bounds testing approach is applied for the causality test. The results show that renewable electricity Granger causes economic growth in target countries, which supports the renewable–growth hypothesis. However, the hypothesis did not hold in countries that export renewable power facilities more than they install them for domestic demand. We believe that the renewable–growth hypothesis would be secured soon if renewable electricity expands broadly over the world.

Keywords: renewable–growth hypothesis; renewable electricity; economic growth; renewable manufacturing; energy–growth nexus (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/8/3121/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/8/3121/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:8:p:3121-:d:344962

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().