The Impact of Renewable Energy Supply on Economic Growth and Productivity

Kamil Makieła, Błażej Mazur and Jakub Głowacki
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Błażej Mazur: Department of Empirical Analyses of Economic Stability, Cracow University of Economics, Rakowicka 27, 31-510 Krakow, Poland
Jakub Głowacki: Department of Public Economics, Cracow University of Economics, Rakowicka 27, 31-510 Krakow, Poland

Energies, 2022, vol. 15, issue 13, 1-13

Abstract: The threat of the negative consequences of global warming makes the discussion about the relationship between economic growth, productivity, and increasing renewable energy involvement an important topic. Hence, the aim of this study is to analyze the impact of renewable energy and energy supply on economic growth and productivity at the national level using stochastic frontier analysis and the aggregate production function framework. In doing so, we analyzed a panel of annual data from 133 countries from 2008 to 2014. We apply a generalized stochastic frontier model, which allows us to differentiate between persistent and transient inefficiency, as well as individual effects. Our results indicate a threshold level in terms of a country’s development that needs to be obtained to benefit from increasing renewable energy involvement over time. However, if this threshold level is obtained, productivity gains are evident. We also found that the role of the energy supply in aggregate production is nontrivial. That is, its inclusion changes the relationship between key input factors (capital and labor) by decreasing their overall elasticities and increasing the observed economies of scale.

Keywords: renewables energy; economic growth; productivity (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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