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Does the clean energy transition enhance economic sustainability? A study on energy use efficiency in developing countries

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  • Guo, Yun
  • Hu, Ke

Abstract

Against the backdrop of global concerns regarding climate change and sustainable development, this study focuses on the challenges faced by developing countries in balancing economic growth and energy transition. It examines whether the shift toward clean energy contributes to economic sustainability. Using data from developing countries spanning 2010–2020, empirical analysis reveals that the clean energy transition significantly promotes economic sustainability, with improved energy use efficiency serving as a key mechanism. Further analysis indicates that economic institutional distance exerts an adverse moderating effect on the positive impact of clean energy transition. Heterogeneity analysis also shows that the promoting effect of clean energy transition on economic sustainability is more pronounced in countries with lower financial risks and higher government efficiency. This research provides theoretical support and policy insights for developing countries aiming to advance green energy policies and achieve a balance between economic and environmental objectives.

Suggested Citation

  • Guo, Yun & Hu, Ke, 2026. "Does the clean energy transition enhance economic sustainability? A study on energy use efficiency in developing countries," Finance Research Letters, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finlet:v:89:y:2026:i:c:s1544612325025644
    DOI: 10.1016/j.frl.2025.109315
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    Keywords

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    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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