Does public-private investment augment renewable energy consumption in BIMSTEC nations? Evidence from symmetric and asymmetric assessment

Abstract

This study investigates the impact of public-private investment, globalization, and urbanization on the aggregation of renewable energy demand in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Nations from 1990 to 2021. Various econometric tools based on panel data analysis are employed to analyze the static properties of the variables using the CADF and CIPS unit root tests and examine the long-run relationship through panel cointegration with an error correction term. The study also employs the CS-ARDL approach to establish long-run and short-run coefficients. Additionally, a panel Granger causality test is conducted. Based on the findings of the primary assessment, the study reveals that the research units exhibit common dynamic properties, indicating the presence of cross-sectional dependency. The static test demonstrates that all variables become stationary after differencing them once. The panel cointegration test confirms a long-run relationship between the variables of interest. According to the coefficients estimated using CS-ARDL, the study concludes that renewable energy consumption has been positively and significantly influenced by all three explanatory variables: public-private investment, globalization, and urbanization. Furthermore, the causality assessment reveals evidence supporting the feedback hypothesis between renewable energy consumption, public-private investment, and globalization. Because of the positive and significant impact of public-private investment, globalization, and urbanization on renewable energy consumption, it may be beneficial to implement targeted policies and investments in these areas to encourage the adoption of renewable energy. Governments and private investors need to join forces to draw investments and create a beneficial atmosphere for renewable energy endeavors which can be achieved by focusing on inventive ways of financing and implementing regulatory frameworks that provide support.