Policy uncertainty and renewable energy transition in the selected OECD countries: do technological innovation and foreign direct investment matter?

Kais Saidi (), Ali Lamouchi () and Mohammad Mafizur Rahman ()
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Kais Saidi: Qassim University
Ali Lamouchi: Mustaqbal University
Mohammad Mafizur Rahman: University of Southern Queensland

Environment Systems and Decisions, 2025, vol. 45, issue 3, 1-17

Abstract: Abstract Renewable energy transition is a crucial issue for economic and environmental sustainability. Therefore, this research explores the relationship between policy uncertainty, innovation, foreign direct investment, and the adoption of renewable energy in a panel of 16 OECD countries from 1990 to 2023. Using the panel-VAR approach, the findings reveal intricate and dynamic linkages between technological innovation, political uncertainty, GDP, foreign direct investment (FDI), and renewable energy. The results, based on GMM estimations and VAR-Granger causality tests, highlight the importance of considering the long-term interactions among these variables. The cointegration of the variables underscores their interconnectedness over time, while the causality tests demonstrate the reciprocal effects that may arise between them.

Keywords: Economic policy uncertainty; Innovation; FDI; RE; Economic growth; Panel-VAR model (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10669-025-10026-1

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