How Does Renewable Energy Respond to Financial Globalization and Information and Communications Technology Trade?

Abstract

Policymakers are looking at renewable energy as a substitute for traditional fossil fuels due to the growing concern about climate change and sustainable development. However, in the case of Asian countries, nothing is known about how ICT trade and financial globalization affect renewable energy consumption. To fill this gap, we have gathered data across 24 Asian economies, and a dynamic panel data approach known as GMM panel VAR is applied. The key outcomes of the GMM panel VAR underscore that ICT trade, financial globalization, and GDP favorably impact the current renewable energy consumption. Furthermore, the panel causality results indicate bidirectional causality between ICT trade, financial globalization, and renewable energy consumption. These findings have policy-relevant implications, highlighting the significance of financial liberalization and ICT-enabled trade in promoting renewable energy usage in Asian nations.