The Impact of Renewable Energy Investment on Economic Growth

Harith Hadi Mohammed Al-Darraji and Amir Bakir
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Harith Hadi Mohammed Al-Darraji: Ph.D. candidate, School of Business -Business Economics Department, University of Jordan, Jordan Author-Orchid id: http://orcid.org/0000-0002-1015-9774
Amir Bakir: Associate Professor, School of Business -Business Economics Department, University of Jordan, Amman, Jordan Author-Orchid id: http://orcid.org/0000-0001-8919-5550

Journal of Social Sciences (COES&RJ-JSS), 2020, vol. 9, issue 2, 234-248

Abstract: The study aimed to define and assess the impact of renewable energy on economic growth. This included the use of panel data for 18 different countries during the period of 2008-2015. The FMOLS econometric technicality was used to estimate the relevant relations between the independent variables, namely; renewable energy, capital, labor and trade openness and the dependent variable, real GDP per capita. The study found that renewable energy affects economic growth positively, however, the elasticity was highly inelastic. Also, the study found positive and significant relationships between economic growth and the other three independent variables with inelastic elasticities. The study concluded that countries should be encouraged to invest in renewable energy and gradually decrease their dependence on conventional energy. Furthermore, it highly recommended to remove all obstacles facing the development of renewable energy.

Keywords: economic growth; renewable energy; GDP per capita; FMOLS; capital; labor; trade openness (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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