Impact of eco-innovation and financial efficiency on renewable energy – Evidence from OECD countries

Abstract

The research on the driving factors of renewable energy consumption has attracted a lot of attention, but the impact of eco-innovation and financial efficiency on it is rare, therefore, we launched this study to explore the impact of financial efficiency and ecological innovation on renewable energy consumption in OECD countries between 2001 and 2018 using fully modified ordinary least square (FMOLS) and Driscoll-Kraay standard error regression. Empirical results show that both financial efficiency and eco-innovation have long-term positive correlations with renewable energy consumption. In addition, we analyzed the heterogeneity of the impact of selected factors on renewable energy consumption through fixed-effects panel quantile regression, and found that with the increase of quantile, the promotion effect of financial efficiency and ecological innovation on renewable energy consumption is decreasing. Finally, we suggest that OECD countries increase and expand their total financial resources, while promoting healthy competition among financial institutions to improve financial efficiency; promote ecological innovation in energy production, transmission and distribution, in order to improve the use of renewable energy.