Exploring the moderating role of foreign direct investment in the renewable energy and economic growth nexus: Evidence from West Africa

Abstract

This study contributes to the renewable energy consumption and economic growth discourse by examining how foreign direct investment moderates this relationship for a panel of 15 West African countries from 1990 to 2021. Applying the Panel-Corrected Standard Errors and the Feasible Generalized Least Squares techniques, the study shows that renewable energy consumption hinders economic growth in West Africa. In addition, foreign direct investment is found to have a positive impact on economic growth. The findings further reveal that the interaction between renewable energy consumption and foreign direct investment has a positive impact on economic growth. Thus, foreign direct investment boosts renewable energy consumption to positively impact economic growth in West Africa.