Economic policy uncertainty and renewable energy innovation: International evidence

Abstract

This research investigates the impact of economic policy uncertainty on renewable energy innovation, based on a panel of 22 countries during the period 1985–2019. The results indicate that economic policy uncertainty exerts a positive effect on renewable energy innovation that lasts for at least 3 years. Subsample analysis shows that OECD members and right-wing countries experience higher growth in renewable energy innovation compared to non-OECD members and left-wing countries. In addition, economic policy uncertainty improves renewable energy innovation only for high institutional quality countries, while the effect becomes insignificant for low institutional quality countries. After separating different renewable energy types, this paper presents that wind energy witnesses a largest incline in renewable energy innovation compared to other renewable energy types. This research provides international evidence for the relationship between economic policy uncertainty and renewable energy innovation.