Uneven Gains: The Performance-Driven Growth-Nexus of Energy, Trade and Investment in High-Income Countries

This study aims to assess the impact of gross capital formation, foreign direct investment, trade openness, and energy consumption on economic growth. Distinct from previous studies that generalize findings across all developed nations, this research focuses exclusively on high-income countries, thereby offering deeper insights into the specific challenges and opportunities these economies encounter. Furthermore, it adopts a performance-based econometric approach, moving beyond conventional income-based classifications in order to differentiate high-income countries based on their actual economic performance rather than static income groupings. Drawing on a panel dataset comprising 54 high-income countries over a 28-year period, this study employs a range of econometric techniques, including panel data analysis, cointegration models, and Granger causality tests. The empirical findings reveal that gross capital formation and energy consumption consistently contribute to economic growth, while the effect of trade openness varies depending on country-specific conditions. Foreign direct investment, however, is found to exert no significant influence on economic growth within the high-income group. Given the observed intra-dimensional divergence, it is suggested that underlying structural or institutional factors may be influencing the growth trajectories within this income category, warranting further investigation. The originality of this study is twofold: first, it contributes to the existing literature by focusing exclusively on high-income countries, analyzing a comprehensive dataset of 54 countries over nearly three decades; second, it introduces a refined econometric framework that captures intra-group performance variation, thereby uncovering heterogeneity that is often obscured by traditional income-based classifications.