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Institutional Quality, Foreign Direct Investment, and Renewable Energy Production: Evidence from Eastern European Countries Using a Panel VAR Model

Author

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  • Esmaeili Korani, Amir Mohammad

    (Doctoral School in Economics, Faculty of Economics and Business Administration, University of Szeged, Hungary)

  • Alam, Shahi Md.Tanvir

    (Visiting Researcher, School of Business Administration in Karviná, Silesian University in Opava, Czech Republic)

  • Rahro, Hamidreza

    (Financial Management Institute, Faculty of Human Science, Islamic Azad University, Iran)

  • Bakhtiaran, Mohammad Javad

    (Economics Institute, Faculty of Economics and Management, Tarbiat Modares University, Iran)

Abstract

Renewable energy is crucial for mitigating climate change, stabilizing energy prices, and preventing energy crises; however, governance quality and foreign direct investment (FDI) in promoting clean energy development are often overlooked. Renewable energy production depends on political decisions and capital, technology, and expertise provided through FDI. This paper examines how institutional quality and FDI inflows affect renewable energy production. We analyze data from 1996 to 2022 across 12 Eastern European countries with growing economies and potential for renewable energy development. Our findings reveal that these countries cannot meet the institutional quality standards and FDI inflows required for renewable energy development.

Suggested Citation

  • Esmaeili Korani, Amir Mohammad & Alam, Shahi Md.Tanvir & Rahro, Hamidreza & Bakhtiaran, Mohammad Javad, 2025. "Institutional Quality, Foreign Direct Investment, and Renewable Energy Production: Evidence from Eastern European Countries Using a Panel VAR Model," International Journal of Energy Economics and Policy, Econjournals, vol. 15(6), pages 334-345, October.
    • Handle: RePEc:eco:journ2:v:15:y:2025:i:6:id:20680
    DOI: 10.32479/ijeep.20680
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