Does disaggregated renewable energy stimulate economic growth? The role of spatial effect

Patrick Schembri, Huijie Yan and Katia Radja

Applied Economics, 2024, vol. 56, issue 2, 213-232

Abstract: This study attempts to empirically investigate the validity of energy-led growth hypothesis for renewable energy sources for developing countries. To this end, this paper estimates the impacts of disaggregated renewable energy sources on economic growth within a multivariate framework including the disaggregated non-renewable energy sources, capital, labour, institutional quality and human capital by using panel data of 32 lower/upper middle income countries over the period 2009 to 2019 and applying spatial dynamic techniques. Our results show the significantly positive impacts of individual renewable sources on economic growth. This study provides the first piece of evidence of spatial spillover effects from renewable energy on economic growth for developing countries. Our analysis reveals the significantly negative impacts of hydroelectricity on economic growth. Our analysis also confirms the importance of labour, institutional quality and human capital in driving economic growth.

Date: 2024
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DOI: 10.1080/00036846.2023.2167917

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