Investigating the Impact of Country Risks on the Relationship between Renewable Energy Consumption and Economic Growth

Sheidaei Habashi, Akbar; Sadeghi, Seyed Kamal; Behboudi, Davood

doi:10.22054/jiee.2023.74029.2014

Investigating the Impact of Country Risks on the Relationship between Renewable Energy Consumption and Economic Growth

Document Type : Research Paper

Authors

Akbar Sheidaei habashi ¹

Seyed Kamal Sadeghi ²

Davood Behboudi ²

¹ Master's Student in Energy Economics, Tabriz University, Tabriz, Iran

² Professor, Department of Economic Development and Planning, Tabriz University, Tabriz, Iran

https://doi.org/10.22054/jiee.2023.74029.2014

Abstract

The purpose of this research is to investigate different levels of country risk and its role in the relationship between renewable energy consumption and economic growth in Iran, during the period (1997-2021). In terms of purpose, this research is of applied type and in terms of causal-analytical method, and the method of collecting information is of documentary-library type. After calculating the threshold value of each variable, we analyzed the effect of renewable energy consumption on economic growth using the threshold distance of different country risks. The results indicate the non-linear effect of renewable energy consumption on economic growth under different risks in the country. This research is one of the first studies in Iran that analyzed the relationship between renewable energy consumption and economic growth based on a risk-based approach. According to the regression model described in the current research, this research provides suggestions for developing a suitable strategic plan with the aim of specifying short-term and long-term goals, and future vision, as a road map for those involved.
.

Keywords

Political risk

financial risk

economic risk

economic growth

renewable energy

Subjects

مطالعات اقتصادی مرتبط با حامل‌های انرژی (فسیلی، تجدیدپذیر و برق)

آقایی، مجید. (1395). بررسی رابطه پویای بین مصرف انرژی و رشد اقتصادی به تفکیک حامل‌های مختلف انرژی و بخش‌های مختلف اقتصادی: کاربردی از آزمون کرانه‌ای، مجله مطالعات اقتصاد انرژی، 12 (49)، 103-161.

بهنامه، مهدی. (1390). بررسی رابطه بلندمدت و کوتاه‌مدت رشد اقتصادی و مصرف زغال سنگ در ایران، مجله راهبرد توسعه، 25 (25)، 248-265.

مهرآرا، محسن و زارعی، محمود. (1390). اثرات غیرخطی مصرف انرژی بر رشد اقتصادی مبتنی بر رویکرد حد آستانه‌ای، مجله پژوهش‌های رشد و توسعه اقتصادی، 2 (5)، 11-44.

References

Aghaei, M. (2011). Investigating the causality relation between energy consumption and economic growth by different carriers of energy and different economic sectors: the application of the ARDL boundary test. Journal of Energy Economics Studies, 12 (49), 103-161. [In Persian]

Aydın, C, Esen, O, Bayrak, M. (2016). Inflation and economic growth: a dynamic panel threshold analysis for Turkish republics in transition process. Procedia-Social and Behavioral Sciences 2016; 229: 196e205.

Behnameh, M. (2011). Study of the Long-Term and Short Term Relationship between Economic Growth and Coal Consumption in Iran, Scientific-Extension. Journal of Development Strategy, 25 (25), 248-265. [In Persian]

Brunnschweiler, C.N. (2009). Finance for renewable energy: an empirical analysis of developing and transition economies. CER-ETH Economics working paper series 2009; 15 (3): 241e74.

Enders, W, Siklos, P.L. (2001). Cointegration and Threshold Adjustment. J. Bus. Econ. Stat, (19): 166-176.

Fredriksson, P.G, Svensson, J. (2003). Political instability, corruption and policy formation: the case of environmental policy 2003; 87 (7e8): 1383e405.

Ghali, K. H, El-Sakka, M. I. T. (2004). Energy use and output growth in Canada: A multivariate cointegration analysis. Energy Economics, 26, 225-238.

Hayakawa, K, Kimura, F & Lee, H. H. (2013). How Does Country Risk Matter for Foreign Direct Investment?. The Developing Economies, 51 (1), 60-78.https://doi.org/10.1111/deve.12002

Ibrahim, M, Alagidede, P. (2018). Nonlinearities in financial developmenteeconomic growth nexus: evidence from sub-Saharan Africa. Res Int Bus Finance 2018; 46: 95e104.

Jalil, A, Tariq, R & Bibi, N. (2014). Fiscal deficit and inflation: new evidences from Pakistan using a bounds testing approach. Econ Modell 2014; 37 (feb): 120e6.

Mehrara, M & Zarei. M. (2011). Nonlinear Effects of Energy Consumption on Economic Growth Based on a Boundary Approach. Journal of Research in Economic Growth and Development, 2 (5), 11- 44. [In Persian]

North, D. C. (1981). Structure and Change in Economic History: Norton.

Oded, G, Joseph, Z. (1993). Income distribution and macroeconomics. Rev Econ Stud 1993; (1): 35e52.

Pokrovski, V. N. (2003). Energy in the theory of production. Energy, 28, 769-788.

Qiang, W, Zequn, D, Rongrong, Li & Lili, W. (2022). Renewable energy and economic growth: New insight from country risks, Energy 2022; 238: 122018.

Sehrawat, M & Giri, A.K. (2018). The impact of financial development, economic growth, income inequality on poverty: evidence from India. Empir Econ 2018; 55.

Turrey, A.A. & Maqbool, T. (2018). Relationship between Economic Growth and Poverty: A Study of Developing and Less Developed Countrıes. Towards Excellence: An Indexed Refereed. Journal of Higher Education, 10 (1), 51-57.

Uzar, U. (2020). Is income inequality a driver for renewable energy consumption?. J Clean Prod 2020; 255: 120287.

Wu, L & Broadstock, D.C. (2015). Does economic, financial and institutional development matter for renewable energy consumption? Evidence from emerging economies. Int J Econ Pol Emerg Econ 2015; 8 (1): 20.

Yaşar, N. (2017). The Relationship between Energy Consumption and Economic Growth: Evidence from Different Income Country Groups. International Journal of Energy Economics and P