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The Interaction Between Renewable Energy Consumption and the Institutional Framework from a Circular Economy-Based Perspective

Author

Listed:
  • Adriana Florina Popa

    (Bucharest University of Economic Studies, Bucharest, Romania)

  • Valentin Burca

    (West University of Timi?oara, Timi?oara, Romania)

  • Daniela Nicoleta Sahlian

    (Bucharest University of Economic Studies, Bucharest, Romania)

  • Daniela Livia Trasca

    (Bucharest University of Economic Studies, Bucharest, Romania)

Abstract

The European Green Deal describes the vision and strategic orientation of EU members of future public policies, which is designed to harmonize countries’ efforts to align national economies with the principles of the circular economy. Among the directions prescribed by the European Green Deal, we find an increase of renewable energy (RE) consumption in parallel with improving energy efficiency and reducing the energy sources that involve significant negative environmental impact in the long run. Our study addressed the association between RE consumption, management decision-making factor, policy landscape addressing energy efficiency, and sustainability innovation capabilities, at a firm-level analysis. For this purpose, we assess the causality between these variables, performing a time series analysis on a sample that covers the period between 2011 and 2019. Regression models are estimated with panel time series FMOLS (Fully Modified Ordinary Least Squares) and DMOLS (Dynamic Modified Ordinary Least Squares) estimation methods. The results underscore that the evolution of renewable energy consumption by firms depends on the management decision, related both to the commitment of managers to sustainable strategies and the effectiveness of governance processes. Nonetheless, our results emphasize the essential role of the country’s institutional factor, which should ensure proper regulation, effective enforcement mechanisms, and financial incentives that promote the RE usage.

Suggested Citation

  • Adriana Florina Popa & Valentin Burca & Daniela Nicoleta Sahlian & Daniela Livia Trasca, 2022. "The Interaction Between Renewable Energy Consumption and the Institutional Framework from a Circular Economy-Based Perspective," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(61), pages 648-648, August.
    • Handle: RePEc:aes:amfeco:v:24:y:2022:i:61:p:648
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    More about this item

    Keywords

    circular economy; renewable energy; energy efficiency; regulatory indicators for sustainable energy; Fully Modified Ordinary Least Squares; generalized method of moments.;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • 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
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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