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The Link between Economic Growth and Sustainable Energy in G7-Countries and E7-Countries: Evidence from a Dynamic Panel Threshold Model

Author

Listed:
  • Najia Saqib

    (Department of Finance, College of Business Administration, Prince Sultan University, Riyadh, Saudi Arabia,)

  • Haider Mahmood

    (Department of Finance, College of Business Administration, Prince Sattam bin Abdulaziz University, 173 Alkharj 11942, Saudi Arabia)

  • Aamir Hussain Siddiqui

    (Applied Economics Research Centre, University of Karachi, Karachi, Pakistan)

  • Muhammad Asif Shamim

    (Department of Business Administration, Salim Habib University, Karachi, Pakistan.)

Abstract

The available literature on sustainable energy use and economic growth nexus yields conflicting conclusions, as the effect can be positive, negative, or insignificant. This research explores the causal link between sustainable energy use and economic growth in G7-countries (Japan, Canada, Germany, Italy, France, United Kingdom, and United States) and E7-countries (Russia, Brazil, Indonesia, China, Mexico, India, and Turkey) countries from 1990 to 2019. We discover that sustainable energy use and economic growth are proportional. Our results show that sustainable energy use positively affects economic growth if E7-countries exceed a specific threshold. It is detrimental to economic growth for the E7 countries' sustainable energy use to fall below a certain threshold. The use of sustainable energy has no significant impact on economic growth, although it does have a positive and noticeable impact in the G7 countries. In order for the countries of the G7 to see positive economic growth as a result of their investment in renewable energy, it is necessary for those nations to surpass a certain threshold in terms of their use of sustainable energy.

Suggested Citation

  • Najia Saqib & Haider Mahmood & Aamir Hussain Siddiqui & Muhammad Asif Shamim, 2022. "The Link between Economic Growth and Sustainable Energy in G7-Countries and E7-Countries: Evidence from a Dynamic Panel Threshold Model," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 294-302, September.
    • Handle: RePEc:eco:journ2:2022-05-35
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    More about this item

    Keywords

    Economic growth; Sustainable energy; Threshold effects; G7 countries; E7 countries;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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