 Renewable energy and bank credit risk: The mediating role of economic growthIoannis Plikas and Dimitrios Kenourgios Economic Modelling, 2026, vol. 160, issue C Abstract: We investigate the relationship between renewable energy sources and bank credit risk. While prior research highlights the economic and environmental benefits of renewable energy, little is known about its impact on credit risk across energy types, market shares and country conditions. Utilizing data from 28 European economies over 2013 to 2022, we employ OLS to empirically examine both the direct effects of renewable energy on credit risk and the indirect effects through economic growth. Our results reveal that renewables stimulate economic growth, strengthening borrowers’ capacity and lowering credit risk, highlighting economic growth as a mediator. Renewable energy acts as a buffer against climate-related shocks. Electricity and heat-based renewables, particularly solar, are most effective. Stronger effects occur in core European economies, while peripheral ones benefit more from institutional quality and environmental, social and governance integration. These findings highlight the role of renewable energy in linking sustainability with long-term financial resilience. Keywords: Renewable energy sources; Climate change; Banking sector; Credit risk; Economic development (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:160:y:2026:i:c:s0264999326001057 DOI: 10.1016/j.econmod.2026.107576 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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