Renewable energy, urban primacy, foreign direct investment, and value-added in European regions

Abstract

This study examines the relation among renewable energy consumption, urban primacy, net FDI inflow, and value-added in manufacturing, construction and mining, services, and agriculture sectors from 2000 to 2019 in four-panel of European regions, Western Europe (WE), Eastern Europe (EE), Northern Europe (NE), and Southern Europe (SE). This research uses the 3SLS simultaneous equation estimation as the main methodology and the panel data cointegration test to check the stationarity. The results show the causality among the renewable energy consumption and agriculture sectors is positive in NE and SE region and negative in EE and WE region. Construction and mining sectors have no causality in SE and EE regions, and, bidirectional causality in NE and WE regions with renewable energy. Finally, the service sector and agriculture sector have bidirectional causality with renewable energy consumption in EE, WE, NE, and SE regions.