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Policy uncertainty and renewable energy transition in the selected OECD countries: do technological innovation and foreign direct investment matter?

Author

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  • Kais Saidi

    (Qassim University)

  • Ali Lamouchi

    (Mustaqbal University)

  • Mohammad Mafizur Rahman

    (University of Southern Queensland)

Abstract

Renewable energy transition is a crucial issue for economic and environmental sustainability. Therefore, this research explores the relationship between policy uncertainty, innovation, foreign direct investment, and the adoption of renewable energy in a panel of 16 OECD countries from 1990 to 2023. Using the panel-VAR approach, the findings reveal intricate and dynamic linkages between technological innovation, political uncertainty, GDP, foreign direct investment (FDI), and renewable energy. The results, based on GMM estimations and VAR-Granger causality tests, highlight the importance of considering the long-term interactions among these variables. The cointegration of the variables underscores their interconnectedness over time, while the causality tests demonstrate the reciprocal effects that may arise between them.

Suggested Citation

  • Kais Saidi & Ali Lamouchi & Mohammad Mafizur Rahman, 2025. "Policy uncertainty and renewable energy transition in the selected OECD countries: do technological innovation and foreign direct investment matter?," Environment Systems and Decisions, Springer, vol. 45(3), pages 1-17, September.
    • Handle: RePEc:spr:envsyd:v:45:y:2025:i:3:d:10.1007_s10669-025-10026-1
    DOI: 10.1007/s10669-025-10026-1
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