Renewable energy led Economic Growth Hypothesis: Evidence from novel panel methods for N-11 economies

Abstract

The energy-growth nexus has been explored extensively by researchers and academia; however, the role of cleaner energy, especially in the context of emerging economies, i.e., Nex-11 countries, have been ignored. Therefore, to fill the gap in the literature, this paper considers a non-parametric panel method, to test directly for the importance of renewable energy in economic performance for Next eleven (N-11) countries. The econometric estimations—which focused on a panel of N-11 countries—determined that: (i) renewable energy consumption boosts economic growth in short run only; and (ii) industry value added, human development, and consumption expenditures accelerate economic, whereas globalization decrease it. Hence, all countries need to reduce the risk associated with renewable energy so that to make them effective for economic growth. Moreover, there is a need to provide different types of invested capital for ongoing activities of renewable energy production. In general, this study provides relevant policy implications in the context of renewable energy, globalisation and economic growth for the Nex-11 economies.