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Political Economy of Clean Energy Transition: The Role of Political Risk and Economic Growth

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  • Jianyu Chen
  • Yue Fu
  • Rong Wang
  • Jie Yang

Abstract

In the empirical determination of the factors influencing the clean energy transition, the BRICS economies have initiated various policy reforms, such as increased R&D budgets, improvements in technology and political stability. This study analyses the critical role of political risk and economic growth, natural resources, research and development and technological innovation in the clean energy transition in the period 1990-2022. Using panel econometric approaches, this study confirms the heterogeneity of slopes and cross-sectional dependence. Using linear regression with the heteroscedastic panel-corrected standard error approach, the results show that economic expansion, political risk and the quadratic R&D term significantly enhance the clean energy transition. However, natural resources, conventional technological innovation and research and development expenditures are the leading barriers to a clean energy transition in the region. The robustness of these results is validated by a series of panel regressions. Following the empirical outcomes, this study recommends rapid enhancement of the research and development budget, strengthening of governance and institutions and investment in technological innovation to attain a sustainable transition towards clean energy sources.

Suggested Citation

  • Jianyu Chen & Yue Fu & Rong Wang & Jie Yang, 2025. "Political Economy of Clean Energy Transition: The Role of Political Risk and Economic Growth," Politická ekonomie, Prague University of Economics and Business, vol. 2025(Spec.issu), pages 297-328.
    • Handle: RePEc:prg:jnlpol:v:2025:y:2025:i:spec.issuei.:id:1486:p:297-328
    DOI: 10.18267/j.polek.1486
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    References listed on IDEAS

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    1. Massimo Filippini & Lester C. Hunt, 2011. "Energy Demand and Energy Efficiency in the OECD Countries: A Stochastic Demand Frontier Approach," The Energy Journal, , vol. 32(2), pages 59-80, April.
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    Keywords

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    JEL classification:

    • 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
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • 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

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