Document Type : Research Paper
Authors
1 Faculty Member of Faculty of Economics and Management, Tabriz University
2 Department of Economics, University of Tabriz .Tabriz, . Iran
Abstract
Renewable energy is a crucial alternative energy source in terms of sustainable growth and climate change. This paper analyzes the causal relationship between renewable energy consumption and economic growth in 26 developing countries over the period 1990–2020. The study employs the bootstrap panel causality test developed by Konya (2006) to account for cross-sectional dependence. Konya’s (2006) method is based on seemingly unrelated regressions (SUR) and Wald tests with country-specific bootstrap critical values.
The results indicate that the causal relationship between renewable energy consumption and economic growth varies across the examined countries, manifesting both symmetric and asymmetric patterns depending on each country's specific conditions. In some countries, evidence of bidirectional causality between these two variables was observed, while in others, a unidirectional causal relationship was confirmed, either from renewable energy consumption to economic growth or vice versa. Moreover, the findings reveal that relying on aggregated data could alter the conclusions, highlighting the necessity of conducting causality analysis at the country level. These findings emphasize the impact of renewable energy policies on the economic growth of developing countries and provide valuable insights for policymakers in formulating sustainable energy strategies.
Keywords
Main Subjects
ارباب، حمیدرضا؛ امامی میبدی، علی و رجبی قادی، صبا. (1396). رابطه مصرف انرژیهای تجدیدپذیر و رشد اقتصادی در کشورهای منتخب اوپک. اقتصاد انرژی ایران (اقتصاد محیط زیست و انرژی)، (23)6.
پرهیزکار کهنه اوغاز، مرتضی؛ نیکوقدم، مسعود و خوشنودی، عبدالله. (۱۴۰۰). بررسی اثر مصرف انرژی تجدیدپذیر بر توسعه پایدار در کشورهای عضو اوپک. اقتصاد و تجارت نوین، (1)16.
فطرس، محمد حسن؛ آقازاده، اکبر و جبرائیلی، سودا. (1390). تأثیر رشد اقتصادی بر مصرف انرژی تجدیدپذیر مقایسه تطبیقیکشورهای منتخب عضو سازمان همکاریهای اقتصادی و توسعه و غیرعضو (شامل ایران). فصلنامه پژوهشها و سیاستهای اقتصادی، (60)19.
کریمپور، ساناز؛ شاکری بستانآباد، رضا و قاسمی، عبدالرسول. (1398). تأثیر مصرف انرژیهای تجدیدپذیر بر رشد اقتصادی کشورهای منتخب منطقه منا: کاربرد مدل خود رگرسیون برداری پانل (Panel VAR). پژوهشنامه اقتصاد انرژی ایران، (8)32.
کریمی، محمدشریف؛ سهیلی، کیومرث و برزگری، شیما. (1399). رابطه بین مصرف انرژی تجدید پذیر و رشد اقتصادی در ایران. علوم و تکنولوژی محیط زیست، (22)6.
نوبهار، الهام و صادقی، ندا. (1402). بررسی رابطه انرژیهای تجدیدپذیر و تجدیدناپذیر با رشد اقتصادی در کشورهای گروه D8 و G7. پژوهشهای رشد و توسعه اقتصادی، (2)17.
Acaravci, A., & Ozturk, I. (2012). Foreign Direct Investment, Export and Economic Growth: Empirical Evidence from New EU Countries. Institute for Economic Forecasting. 0(2).
Akadiri, S., Alola, AA., Akadiri, AC., & Alola, UV. (2019). Renewable energy consumption in EU-28 countries: policy toward pollution mitigation and economic sustainability. Energy Policy, 132(1). Doi:10.1016/j.enpol.2019.06.040
Akerlof, G. (1970). The market for lemons: quality uncertainty and the market mechanism. The Quarterly Journal of Economics, 84(1).
Apergis N., & Payne, JE. (2014). The causal dynamics between renewable energy, real GDP, emissions and oil prices: evidence from OECD countries. Applied Econ, 46(36), 4519-4525.
Doi,10.1080/00036846.2014.964834
Apergis, N., & Payne, JE. (2014). Renewable energy, output, CO2 emissions, and fossil fuel prices in Central America, evidence from a nonlinear panel smooth transition vector error correction model. Energy Econ, 42(1), 226-232.
Doi:https://doi.org/10.1016/j.eneco.2014.01.003
Arbab, H.R., Emami Meybodi, A., & Rajabi Ghadi, S. (2017). The relationship between renewable energy consumption and economic growth in selected OPEC countries. Iranian Energy Economics (Environmental and Energy Economics), 6(23), 29-56. [In Persian]
Asif, M., Bashir, S., & Khan, S. (2021). Impact of non-renewable and renewable energy consumption on economic growth: evidence from income and regional groups of countries. Environ Sci Pollut Res, 28(1), 38764-38773. Doi:10.1007/s11356-021-13448-x
Aslan, A., & Ocal, O. (2016). The role of renewable energy consumption in economic growth: evidence from asymmetric causality. Renew Sustain Energy Rev, 60, 953-959. Doi:10.1016/j.rser.2016.01.123
Belke, A., Dobnik, F., & Dreger, C. (2011). Energy consumption and economic growth: new insights into the cointegration relationship. Energy Econ, 33(5), 782-789. Doi:10.2139/ssrn.1635765
Berradia, H., Abid, M., Sakrafi, H., Gheraia, Z., & Abdelli, H. (2023). The effect of renewable energyconsumption on economicgrowth in KSA, A bootstrapcausality test. Energy & Environment,35(4), 1-18. Doi: 10.1177/0958305X221096856
- (2019). BP Statistical Review of World Energy. https://www.bp. com/en/global/ corporate/energy-economics/statistical-review of-world-energy.html. (accessed 13 March 2020). https://www.bp.com/content/ dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-full-report.pdf
Breitung, J. (2005). A parametric approach to the estimation of cointegration vectors in panel data. Econometric reviews, 24(2),151- 173. Doi:10.1081/ETC-200067895
Breusch, T.S., & Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics. The review of economic studies, 47(1),239-253. Doi: https://doi.org/10.2307/2297111
Chang, T., Gupta, R., Inglesi-Lotz, R., Simo-Kengne, B., Smithers, D., & Trembling, A. (2015). Renewable energy and growth: evidence from heterogeneous panel of G7 countries using Granger causality. Renew Sustain Energy Rev, 52(1), 1405-1412. Doi:10.1016/j.rser.2015.08.022
Doytch, N., & Narayan, S. (2021). Does transitioning towards renewable energy accelerate economic growth? An analysis of sectoral growth for a dynamic panel of countries. Energy, 235(1), 1-16. Doi:10.1016/j.energy. 2021.121290
Eyuboglu, S., & Eyuboglu, K. (2020). Tourism development and economic growth: an asymmetric panel causality test. Curr Issues Tour, 23(6),
659-665. Doi:10.1080/13683500.2019.1588863Fotros, M.H., Aghazadeh, A., & Jebraeili, S. (2011). The impact of economic growth on renewable energy consumption: A comparative analysis of selected OECD and non-OECD countries (including Iran). Quarterly Journal of Economic Research and Policies, 19(60), 81-98. [In Persian]
Gardiner, R., & Hajek, P. (2020). Interactions among energy consumption, CO2, and economic development in European Union countries. Sustain Dev, 28(4), 723-740. Doi:10.1002/sd.2023
Granger, CWJ., & Yoon, G. (2002). Hidden cointegration. University of California, Economics Working Paper, 10(1),2002-02. Doi: http://dx.doi.org/10.2139/ssrn.313831
Grossman, G.M., & Krueger, A.B. (1995). Economic Growth and the Environment. The Quarterly Journal of Economics, 110(2),353-377. Doi: https://doi.org/10.2307/2118443
Hoyos, R.E., & Sarafidis, V. (2006). Testing for cross-sectional dependence in panel-data models. The stata journal, 6(4), 482-496. Doi:10.1177/1536867X0600600403
Inglesi-Lotz, R. (2016). The impact of renewable energy consumption to economic growth: a panel data application. Energy Econ, 53, 58-63. Doi:10.1016/j.eneco.2015.01.003
Jakovac, P. (2018). Causality between energy consumption and economic growth: literature review. In INTCESS 2018-5th International Conference on Education and Social Sciences.
Karimi, M.S., Soheili, K., & Barzegari, Sh. (2020). The relationship between renewable energy consumption and economic growth in Iran. Environmental Science and Technology, 6(22), 31-47. [In Persian]
Karimpour, S., Shakeri Bostanabad, R., & Ghasemi, A. (2019). The impact of renewable energy consumption on economic growth in selected MENA countries: Application of the Panel VAR model. Iranian Energy Economics Research Journal, 32(8), 99-129. [In Persian]
Kilci, E.N. (2023). An investigation on the causality link between renewable energy consumption and economic growth in selected Euro-Area countries. Energy Sources, 6(7),1-20. Doi:10.1080/15567249.2023.2250844
Kónya, L. (2006). Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Econ Model, 23(6), 978-992. Doi:10.1016/j.econmod.2006.04.008
Kraft, J., & Kraft, A. (1978). On the relationship between energy and GNP. J Energy Dev, 23(10),401-403.
Nobahar, E., & Sadeghi, N. (2023). Examining the relationship between renewable and non-renewable energy and economic growth in D8 and G7 countries. Economic Growth and Development Research, 17(2), 1-20. [In Persian]
Ozcan, B., & Ozturk, I. (2019). Renewable energy consumption-economic growth nexus in emerging countries: a bootstrap panel causality test. Renew Sustain Energy Rev, 104, 30-37. Doi:10.1016/j.rser.2019.01.020
Ozturk, I. (2010). A literature survey on energy-growth nexus. Energy Policy, 38(1), 340-349. Doi:10.1016/j.enpol.2009.09.024
Pao, H.T. and Fu, H.C. (2013) Renewable Energy, Non-Renewable Energy and Economic Growth in Brazil. Renewable and Sustainable Energy Reviews, 25(1), 381-392. Doi:10.1016/j.rser.2013.05.004
Parhizkar Kohneh Oghaz, M., Nikoghadam, M., & Khoshnoudi, A. (2021). The impact of renewable energy consumption on sustainable development in OPEC member countries. Modern Economy and Trade, 16(1), 31-60. [In Persian]
Pesaran, M. H., & Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of econometrics, 142(1), 50-93. Doi:10.2139/ssrn.671050
Pesaran, M.H. (2006). Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica, 74(4), 967-1012. Doi:10.1111/j.1468-0262.2006.00692.x
Pesaran, MH. (2004). General diagnostic tests for cross section dependence in panels. The University of Cambridge, Faculty of Economics, Cambridge Working Papers in Economics No, 0435. Doi:10.2139/ssrn. 572504
Rahman, M.M., & Velayutham, E. (2020). Renewable and non-renewable energy consumption-economic growth nexus: new evidence from South Asia. Renew Energy, 147(1): 399-408. Doi: https://doi.org/10.1016/ j.renene.2019.09.007
Sadorsky, P. (2009). Renewable energy consumption and income in emerging economies. Energy Policy, Elsevier, 37(10),4021-4028. Doi:10.1016/j.enpol.2009.05.003
Sari, R., & Soytas, U. (2007). The growth of income and energy consumption in six developing countries. Energy Policy, 35(2), 889-898. Doi:10.1016/j.enpol.2006.01.021
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics, 70(1), 65-94.
Spence, M. (1973). Job market signalling. The Quarterly Journal of Economics, 87(1), 355-374.
Stiglitz, J. (1974). Incentives and risk sharing in sharecropping. The Review of Economic Studies, 41(1), 219-255.
Strunz, S., Gawel, E., & Lehmann, P. (2016). The political economy of renewable energy policies in Germany and the EU. Util Policy, 42(1),
33-41. Doi:10.1016/j.jup.2016.04.005Wolde-Rufael, Y. (2009). Energy consumption and economic growth: the experience of African countries revisited. Energy Econ, 31(2), 217-224. Doi:10.1016/j.eneco.2008.11.005
World Bank. (2020). Global Economic Prospects, June 2020. https://www.worldbank.org/ext/en/home
Yilanci, V., & Aydin, M. (2017). Oil prices and stock prices: an asymmetric panel causality approach. J Appl Res Finance Econ, 2(4), 9-19. Doi: 10.1080/00036846.2016.1221045
)