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Reexamining the Foreign direct investment, Renewable energy consumption and Economic growth nexus: Evidence from a new Bootstrap ARDL test for Cointegration

Tarek Ghazouani ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study re-examines the long-run relationship among foreign direct investment (FDI), renewable energy consumption (RE) and economic growth (GDP) for 9 Middle East and North Africa (MENA) countries over the period 1990–2015 using a newly developed cointegration test by McNown et al. (2018), the bootstrap autoregressive distributed lag (ARDL) which allows us to generate critical values for ARDL tests that are valid and appropriate for the specific data sets used and allow for endogeneity and feedback that may exist among the variables. In the long run analysis, we found evidence of cointegraion: (i) for Algeria, Armenia, Mauritania, and Tunisia when GDP is the dependant variable; (ii) for Egypt, Iran, Israel, Tunisia and Turkey when FDI is the dependent variable; and (iii) only for Iran, Morocco, and Tunisia when RE is the dependent variable. The short run Granger-causality analysis reveals varied nature of direction of causality between all variables and that is different among countries. This confirms that uniform policy recommendation relating to the causality between these variables may not work for these selected MENA countries.

Keywords: FDI; Renewable energy consumption; Economic growth; Bootstrap ARDL; MENA (search for similar items in EconPapers)
JEL-codes: C15 F21 O11 Q43 (search for similar items in EconPapers)
Date: 2018-11-11, Revised 2020-09-11
New Economics Papers: this item is included in nep-ara, nep-ene and nep-int
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Working Paper: Re-examining the Foreign direct investment, Renewable energy consumption and Economic growth nexus: Evidence from a new Bootstrap ARDL test for Cointegration (2018) Downloads
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