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A Comparative Analysis of the Relationship between Renewable Energy Production and Economic Growth

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  • Mehmet Uçaravcı
  • Tuğba Akın

Abstract

The world has relied heavily on non-renewable sources in energy production for a long time. Although renewable energy investment is costly, especially for developing countries, the energy continuity provided by these sustainable sources can lower investment costs dramatically in the long run. Improvement of factors like economic growth and social welfare are believed to increase awareness of sustainable energy production. In this context, this paper examines the relationship between renewable energy production and the economic growth of Germany, and France, which are low energy-dependent countries, and Turkey, which is heavily dependent on external sources in terms of energy. The paper uses annual data between 1970-2018. The stationarity of variables was tested with methods developed by Zivot and Andrews (1992), and Enders and Lee (2012). Cointegration analysis with structural breaks developed by Gregory and Hansen (1996) was used to evaluate the relationship between variables. The results from the regime shift model indicate that structural reforms caused a significant regime shift in the relationship between energy production and economic growth in Germany and Turkey whereas the reforms did not lead to such a shift in France. The results of the causality analysis indicate a unidirectional causality from GDP to RN for Turkey and Germany.

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  • Mehmet Uçaravcı & Tuğba Akın, 2023. "A Comparative Analysis of the Relationship between Renewable Energy Production and Economic Growth," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 11(1), pages 1-16, July.
    • Handle: RePEc:anm:alpnmr:v:11:y:2023:i:1:p:1-16
    DOI: https://doi.org/10.17093/alphanumeric.977654
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    References listed on IDEAS

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    More about this item

    Keywords

    Cointegration; Fourier Approach; Growth; Renewable Energy;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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