Non-parametric research methods to measure energy efficiency and renewable energy nexus: evidence from emerging economies

Abstract

This study aims to analyse the connection between energy efficiency and renewable energy consumption in the emerging seven (E7) economies during the period 1990–2020. This study also examines the impact of economic growth, carbon emissions and technological innovation on renewable energy. This study employs various panel data approaches that validate the irregular distribution of data and the heterogeneous slopes coefficients. The cross-section dependence test confirms that cross-section dependence is present in the study variables. While these variables are cointegrated. Using non-parametric panel data approaches, the moments' quantile regression results unveil that economic growth is positively associated with renewable energy in all quantiles. Whereas energy efficiency and carbon emissions showed mixed results, negatively affect renewable energy consumption in the lower quantiles, insignificant in the medium quantiles and positive in the higher quantiles. On the other hand, technological innovation is found negatively related to renewable energy consumption. Bidirectional causal association is found between explanatory variables and renewable energy consumption. Based on the empirical findings, this study suggests policies to divert economic growth from fossil fuel energy consumption, enhancing investment in the renewable energy sector, promoting energy efficiency and investment in environmental-related technologies to promote renewable energy.