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Renewable Energy Development as a Driver of Economic Growth: Evidence from Multivariate Panel Data Analysis

Nadia Singh (), Richard Nyuur () and Ben Richmond ()
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Nadia Singh: Newcastle Business School, Northumbria University, Newcastle NE1 8ST, UK
Richard Nyuur: Newcastle Business School, Northumbria University, Newcastle NE1 8ST, UK
Ben Richmond: Newcastle Business School, Northumbria University, Newcastle NE1 8ST, UK

Sustainability, 2019, vol. 11, issue 8, 1-18

Abstract: Renewable energy is being increasingly touted as the “fuel of the future,” which will help to reconcile the prerogatives of high economic growth and an economically friendly development trajectory. This paper seeks to examine relationships between renewable energy production and economic growth and the differential impact on both developed and developing economies. We employed the Fully Modified Ordinary Least Square (FMOLS) regression model to a sample of 20 developed and developing countries for the period 1995–2016. Our key empirical findings reveal that renewable energy production is associated with a positive and statistically significant impact on economic growth in both developed and developing countries for the period 1995–2016. Our results also show that the impact of renewable energy production on economic growth is higher in developing economies, as compared to developed economies. In developed countries, an increase in renewable energy production leads to a 0.07 per cent rise in output, compared to only 0.05 per cent rise in output for developing countries. These findings have important implications for policymakers and reveal that renewable energy production can offer an environmentally sustainable means of economic growth in the future.

Keywords: renewable energy; economic growth; sustainability; panel data regression; developing economies; developed economies (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2019
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