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The Impact of CO 2 Emissions and Energy Consumption on Economic Growth: A Panel Data Analysis

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  • Armenia Androniceanu

    (Faculty of Administration and Public Management, Bucharest University of Economic Studies, 6 Piata Romana, 010374 Bucharest, Romania)

  • Irina Georgescu

    (Faculty of Economic Cybernetics and Informatics, Bucharest University of Economic Studies, 6 Piata Romana, 010374 Bucharest, Romania)

Abstract

This study aims to examine the dynamic connection among economic growth, CO 2 emissions, energy consumption, and foreign direct investments (FDIs). The panel section considers the period of 2000–2020 for 25 EU Member States excluding Malta and Croatia. The annual data are retrieved from the World Bank and Eurostat databases. The empirical analysis used estimation procedures such as first- and second-generation panel unit root tests (CIPS) and panel ARDL based on the three estimators PMG, MG, and DFE. The Hausman test indicated that the PMG estimator is the most efficient. The PMG and DFE estimators suggested that there exist only short-run causalities from CO 2 emissions, energy consumption, and FDIs to GDP growth rate, while the MG estimator proved the existence of both short-run and long-run causalities. Three hypotheses on the positive correlation between the three regressors and GDP growth rate were in general confirmed. The identified causalities may represent recommendations for policymakers to stimulate the renewable energy sector to improve sustainable development.

Suggested Citation

  • Armenia Androniceanu & Irina Georgescu, 2023. "The Impact of CO 2 Emissions and Energy Consumption on Economic Growth: A Panel Data Analysis," Energies, MDPI, vol. 16(3), pages 1-17, January.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:3:p:1342-:d:1048120
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    2. Chen, Yu & Zhao, Changyi & Chen, Shan & Chen, Wenqing & Wan, Kunyang & Wei, Jia, 2023. "Riding the green rails: Exploring the nexus between high-speed trains, green innovation, and carbon emissions," Energy, Elsevier, vol. 282(C).

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