Exploring the Forms of the Economic Effects of Renewable Energy Consumption: Evidence from China

Yugang He and Panpan Huang
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Yugang He: College of Liberal Arts, Sejong University, Seoul 05006, Korea
Panpan Huang: College of Business and Economics, Chung-Ang University, Seoul 06974, Korea

Sustainability, 2022, vol. 14, issue 13, 1-16

Abstract: Renewable energy’s economic effects have been hotly debated, as it is a promising energy source. However, scholars have not achieved an agreement on this hot topic. Therefore, this article re-examines the direct and indirect economic effects of renewable energy consumption in China from 1990 to 2020. Using the Granger causality test to conduct empirical analysis, the result suggests there is a bidirectional causality between renewable energy consumption and economic growth. Then, the mediation model is used for further analysis. The results suggest that economic growth is positively affected by renewable energy consumption. Meanwhile, renewable energy consumption can also indirectly affect economic growth through gross capital formation, the labor force, trade openness, research and development expenditure, and foreign direct investment. Based on the evidence this article provides, policymakers can issue corresponding policies to maintain sustainable economic growth while minimizing environmental pollution.

Keywords: renewable energy consumption; economic growth; Granger causality test; mediation model; paths (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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