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Green investment: Trends and determinants


  • Eyraud, Luc
  • Clements, Benedict
  • Wane, Abdoul


This paper fills a gap in the macroeconomic literature on renewable sources of energy. It offers a definition of green investment and analyzes the trends and determinants of this investment over the last decade for 35 advanced and emerging countries. We use a new multi-country historical dataset and find that green investment has become a key driver of the energy sector and that its rapid growth is now mostly driven by China. Our econometric results suggest that green investment is boosted by economic growth, a sound financial system conducive to low interest rates, and high fuel prices. We also find that some policy interventions, such as the introduction of carbon pricing schemes or “feed-in-tariffs,” which require use of “green” energy, have a positive and significant impact on green investment. Other interventions, such as biofuel support, do not appear to be associated with higher green investment.

Suggested Citation

  • Eyraud, Luc & Clements, Benedict & Wane, Abdoul, 2013. "Green investment: Trends and determinants," Energy Policy, Elsevier, vol. 60(C), pages 852-865.
  • Handle: RePEc:eee:enepol:v:60:y:2013:i:c:p:852-865 DOI: 10.1016/j.enpol.2013.04.039

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    References listed on IDEAS

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    Cited by:

    1. Dafermos, Yannis & Nikolaidi, Maria & Galanis, Giorgos, 2017. "A stock-flow-fund ecological macroeconomic model," Ecological Economics, Elsevier, vol. 131(C), pages 191-207.
    2. Marra, Alessandro & Antonelli, Paola & Dell’Anna, Luca & Pozzi, Cesare, 2015. "A network analysis using metadata to investigate innovation in clean-tech – Implications for energy policy," Energy Policy, Elsevier, vol. 86(C), pages 17-26.
    3. Rahbauer, Sebastian & Menapace, Luisa & Menrad, Klaus & Decker, Thomas, 2016. "Adoption of green electricity by small- and medium-sized enterprises in Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1185-1194.
    4. Heshmati, Almas, 2014. "An Empirical Survey of the Ramifications of a Green Economy," Working Paper Series in Economics and Institutions of Innovation 356, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    5. repec:eee:tefoso:v:127:y:2018:i:c:p:8-22 is not listed on IDEAS
    6. Fortune Ganda & Collins C. Ngwakwe & Cosmas M. Ambe, 2015. "Profitability as a Factor That Spurs Corporate Green Investment Practices in Johannesburg Stock Exchange (JSE) Listed Firms," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(3 (Fall)), pages 231-252.
    7. repec:eee:enepol:v:110:y:2017:i:c:p:105-116 is not listed on IDEAS
    8. Bohl, Martin T. & Kaufmann, Philipp & Siklos, Pierre L., 2015. "What drove the mid-2000s explosiveness in alternative energy stock prices? Evidence from U.S., European and global indices," International Review of Financial Analysis, Elsevier, vol. 40(C), pages 194-206.


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