IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v92y2026icp837-854.html

Geopolitical risk and renewable energy transition: An economic analysis of the inverted U-shaped effect

Author

Listed:
  • Zhu, Xiaojiao
  • Fang, Hui
  • Ma, Jie

Abstract

Drawing on panel observations for 42 countries over the period 1990–2022, this paper explores how geopolitical risks exert a non-linear influence on renewable energy transition performance. The analysis establishes an inverted U-shaped relationship, demonstrating that while moderate geopolitical risk stimulates transition, excessive risk significantly inhibits progress, with the turning point estimated at a GPR index value of approximately 2.41. This core finding is robust to a range of sensitivity checks and is further supported by a panel threshold model, which identifies a distinct structural break reinforcing the evidence of non-linearity. The curvilinear pattern holds for advanced economies and energy-exporting nations, but not for developing economies or energy-importing counterparts. Further analysis reveals that stronger institutional quality magnifies the harm of high geopolitical risk, stricter environmental policies enhance gains under lower-risk conditions, and financial development acts as a double-edged sword amplifying both ends of the inverted U-curve. Overall, geopolitical risk's impact is contingent on risk level and national context, requiring adaptive, tailored policies.

Suggested Citation

  • Zhu, Xiaojiao & Fang, Hui & Ma, Jie, 2026. "Geopolitical risk and renewable energy transition: An economic analysis of the inverted U-shaped effect," Economic Analysis and Policy, Elsevier, vol. 92(C), pages 837-854.
    • Handle: RePEc:eee:ecanpo:v:92:y:2026:i:c:p:837-854
    DOI: 10.1016/j.eap.2026.06.046
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592626002419
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2026.06.046?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:92:y:2026:i:c:p:837-854. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.