Nexus between renewable energy, foreign direct investment, and agro-productivity: The mediating role of carbon emission

The study imputes to evaluate the impact of Renewable energy (RE), and FDI on agro-productivity (AP) provided the mediating role of Carbon emission with panel estimation spanning from 1985 to 2019. As a sample of data, the study considers four sets of the panel, i.e., lower-income countries, Lower-middle income countries, Upper-middle income countries, and a global model. The study applies several econometrical techniques, including Generalized Methods of Moments (GMM), System-GMM, Nonlinear ARDL, and heterogeneous causality test. The results of panel unit root tests establish variables order integration in a mixed border, and panel cointegration test ascertains the presence of long-run association among the researched variables. Empirical models outcome with System-GMM confirms that the RE and FDI expose a positive statistically significant association with AP and mixed-effects running from carbon emission. Nonlinear estimation confirms the long-run asymmetry available in the equation. Moreover, asymmetry shocks in RE and FDI are positive, statistically significant in all empirical estimation. In the case of asymmetric shocks in CO2, it reveals a positive, statistically significant association in a panel with lower-income countries. The directional causality results with heterogeneous causality indicate the feedback hypothesis explaining the causality between RE and AP and FDI and AP in lower-income and upper-middle-income countries. Furthermore, unidirectional causality running from CO2 to carbon emission in all panel estimation.