Transition towards ecological sustainability through fiscal decentralization, renewable energy and green investment in OECD countries

Yunpeng Sun, Weimin Guan, Asif Razzaq, Mohsin Shahzad and Nguyen Binh An

Renewable Energy, 2022, vol. 190, issue C, 385-395

Abstract: Fiscal decentralization implies the transfer of fiscal and financial authority to local government, which is highly integrated with sustainable economic decisions. Against this backdrop, this research examines the asymmetric impact of fiscal decentralization, green investment, and renewable energy consumption on ecological footprints from the context of selected OECD member states during 1990–2019. Moreover, it also examines the moderating role of fiscal decentralization in promoting green investment and, subsequently, environmental sustainability. For this purpose, advanced panel data estimators are applied to confirm cross-sectional dependency, unit-roots, and cointegration among model variables. Besides linear heterogeneous estimators, this research uses methods of moments quantile regression (MMQR) to integrate asymmetric behaviors of regressors. The preliminary results confirm cross-sectional dependence, non-stationarity, and cointegration properties among the variables of interest. The overall findings report that fiscal decentralization, green investment, and renewable energy consumption play a significant role in reducing the ecological footprints; however, their effects significantly varied across lower, medium, and higher quantiles. Particularly, these effects are more pronounced from middle to highest quantiles. Moreover, the interactive effects of fiscal decentralization and green investment are strongly negative, implying a substantial decrease in the ecological footprints of sample countries. These results suggest that fiscal decentralization improves environmental sustainability through green investment and renewable energy transition.

Keywords: Fiscal decentralization; Green investment; Renewable energy; Ecological footprint; Panel quantile (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (47)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960148122003834
Full text for ScienceDirect subscribers only

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:eee:renene:v:190:y:2022:i:c:p:385-395

DOI: 10.1016/j.renene.2022.03.099

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

More articles in Renewable Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().