Drivers of renewable energy transition: The role of ICT, human development, financialization, and R&D investment in China

Abstract

The study investigates key drivers of renewable energy transition in China using the quarterly data from Q1-2000 to Q4-2020. We employed the Bootstrap Autoregressive Distributed Lag method for long-run and short-run parameters. The results exhibit that financial development and research and development expenditures are the most prominent factors that encourage energy transition. In addition, human resources and information and communication technology (ICT) also contribute to stimulating the renewable energy transition in China. The overall long-run estimates have pronounced impact than the short-run results, except for the ICT, which has an insignificant effect in the short run. Moreover, the significant negative value of the error correction term converges the model by a 32.9% adjustment rate in case of any deviation. The empirical outcome recommends that the government of China should promote financial development resources and R&D spending to spur the energy transition.