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Does Renewable Energy Consumption a Driver for Economic Growth? Panel Data Analysis in Selected OIC Countries

Author

Listed:
  • Wahyu Pratomo

    (Universitas Sumatera Utara, Medan, Indonesia.)

  • Aam Rusydiana

    (SMART Indonesia)

  • Ririn Riani

    (SMART Indonesia)

  • Rukiah Lubis

    (UIN Syekh Ali Hasan Ahmad Addary, Padangsidimpuan, Indonesia)

  • Lina Marlina

    (Siliwangi University, Tasikmalaya, Indonesia)

  • Purnama Putra

    (Universitas Islam 45, Bekasi, Indonesia)

  • Nurismalatri Nurismalatri

    (Universitas Pamulang, Indonesia)

Abstract

This paper aims to examine the relationship between energy consumption from renewable energy sources, and economic growth expressed in GDP per capita in several OIC countries. The dataset used involves data from OIC (Organization of Islamic Cooperation) countries including Indonesia, Iran, Turkey, Saudi Arabia, Nigeria, Egypt, UAE, Malaysia, Bangladesh, and Pakistan for the period 2000 to 2018 obtained from the World Development Index. This study uses a dynamic panel estimation approach such as DOLS and FMOLS to determine the long-term relationship between variables. We also discuss how to use the panel Granger-causality test to estimate causality in the short term. The empirical result shows that in the long-run, renewable energy consumption doesn't have an effect on economic growth. Meanwhile, CO2 emissions were found to have a significant positive relationship with economic growth. Furthermore, the conservation hypothesis theory is accepted between economic growth and consumption of renewable energy. Thus, the implementation of conservation policies can be applied by taking into account economic growth.

Suggested Citation

  • Wahyu Pratomo & Aam Rusydiana & Ririn Riani & Rukiah Lubis & Lina Marlina & Purnama Putra & Nurismalatri Nurismalatri, 2023. "Does Renewable Energy Consumption a Driver for Economic Growth? Panel Data Analysis in Selected OIC Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 573-580, November.
    • Handle: RePEc:eco:journ2:2023-06-59
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    References listed on IDEAS

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    More about this item

    Keywords

    Dynamic panel; Renewable energy; Emissions; Economic growth; OIC countries;
    All these keywords.

    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
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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