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Renewable Energy, Trade Performance and the Conditional Role of Finance and Institutional Capacity of sub-Sahara African Countries

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  • Opeyemi Akinyemi

    () (Covenant University, Ota, Nigeria)

  • Uchenna Efobi

    () (Covenant University, Ota, Nigeria)

  • Simplice A. Asongu

    () (Yaoundé, Cameroon)

  • Evans S. Osabuohien

    () (Covenant University, Ota, Nigeria)

Abstract

The paper investigates the dynamic relationship between renewable energy usage and trade performance in sub-Saharan Africa (SSA), while considering the conditioning role of corruption control, regulatory quality, and the private sector access to finance. Focusing on 42 SSA countries for the period 2004-2016, and engaging the System generalized method of moments (GMM) technique for its estimation, this study found a negative relationship between renewable energy usage and the indicators of trade performance. However, with corruption control, improved regulatory framework, and better finance for the private sector, there are potentials for a positive net impact of renewable energy usage on manufacturing export. For renewable energy and total trade nexus, we find that improved regulatory framework and better finance for the private sector are important conditioning structures. These findings are significant because they highlight the different important structures of SSA countries that improve the effect of renewable energy use on trade outcomes. For instance, the consideration of the financial, institutional and regulatory frameworks in SSA countries in conditioning the renewable energy-trade nexus stipulates a clear policy pathway for countries in this region as the debate for transition to the use of renewable energy progresses.

Suggested Citation

  • Opeyemi Akinyemi & Uchenna Efobi & Simplice A. Asongu & Evans S. Osabuohien, 2019. "Renewable Energy, Trade Performance and the Conditional Role of Finance and Institutional Capacity of sub-Sahara African Countries," Working Papers 19/032, European Xtramile Centre of African Studies (EXCAS).
  • Handle: RePEc:exs:wpaper:19/032
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    Cited by:

    1. Asongu, Simplice A & Odhiambo, Nicholas M, 2020. "Inequality and Renewable Energy Consumption in Sub-Saharan Africa: Implication for High Income Countries," Working Papers 26932, University of South Africa, Department of Economics.
    2. Simplice A. Asongu & Chimere O. Iheonu & Kingsley O. Odo, 2019. "The Conditional Relationship between Renewable Energy and Environmental Quality in Sub-Saharan Africa," Working Papers of the African Governance and Development Institute. 19/074, African Governance and Development Institute..
    3. Simplice A. Asongu & Nicholas M. Odhiambo, 2021. "Income Levels, Governance and Inclusive Human Development in Sub-Saharan Africa," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(1), pages 71-103, February.
    4. Asongu, Simplice A. & Odhiambo, Nicholas M., 2021. "Inequality, finance and renewable energy consumption in Sub-Saharan Africa," Renewable Energy, Elsevier, vol. 165(P1), pages 678-688.
    5. Uchechukwu E. Okorie & Evans S. Osabuohien & Hassan E. Oaikhenan, 2020. "Electricity Consumption, Public Agricultural Expenditure and Output in Nigeria: A Time Series Dynamic Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 113-123.
    6. Simplice A. Asongu, 2019. "Financial Access and Productivity Dynamics in Sub-Saharan Africa," Working Papers 19/052, European Xtramile Centre of African Studies (EXCAS).
    7. Simplice A. Asongu & Nicholas M. Odhiambo, 2020. "The Green Economy and Inequality in Sub-Saharan Africa: Avoidable Thresholds and Thresholds for Complementary Policies," Working Papers of the African Governance and Development Institute. 20/097, African Governance and Development Institute..
    8. Simplice A. Asongu & Nicholas M. Odhiambo, 0. "Income Levels, Governance and Inclusive Human Development in Sub-Saharan Africa," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 0, pages 1-33.
    9. Dalla Longa, Francesco & van der Zwaan, Bob, 2021. "Heart of light: an assessment of enhanced electricity access in Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 136(C).
    10. Asongu, Simplice & Vo, Xuan, 2020. "The Effect of Finance on Inequality in Sub-Saharan Africa: Avoidable CO2 emissions Thresholds," MPRA Paper 103233, University Library of Munich, Germany.

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    More about this item

    Keywords

    Environment; Green growth; Trade performance; Pollution; Renewable energy; sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • F1 - International Economics - - Trade
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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