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Examining the Asymmetric Effects of Renewable Energy Use, Financial Development, and Trade Openness on Economic Growth in D-8 Islamic Countries

Author

Listed:
  • Ali Umar Ahmad

    (Faculty of Maritime Study, Universiti Malaysia Terengganu, 21030 Kuala Nerus, Terengganu, Malaysia)

  • Atiku Muhammad Abubakar

    (Department of Economics, Al-Qalam University, Katsina, Nigeria)

  • Nabil Ahmed Mareai Senan

    (Department of Accounting, College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia; & Department of Accounting, Administrative Science College, Albaydha University, Yemen)

  • Uzairu Muhammad Gwadabe

    (Faculty of Business and Management, Universiti Sultan Zainal Abidin, Terengganu, Malaysia)

  • Badamasi Sani Mohammed

    (Department of Economics, Al-Qalam University, Katsina, Nigeria)

  • Maikudi Muhammad

    (Accounting Department, University of Saba Region, Yemen)

  • Abdulrahman Mohammed Hasan AL-Yazidi

    (Accounting Department, University of Saba Region, Yemen)

  • Bashir Yakubu Sani

    (Capital University of Economics and Business, China)

  • Mustapha Jamiu

    (Department of Accounting Education, Federal College of Education (Technical) Bichi, Kano State, Nigeria)

  • Umar Aliyu Mustapha

    (Department of Accounting, Faculty of Social and Management Sciences, Baba-Ahmed University Kano, Nigeria)

Abstract

This study investigates the asymmetric impacts of financial development, renewable energy consumption, and trade openness on economic growth in D-8 Islamic countries from 1970 to 2022, using advanced panel data techniques. The findings reveal long-run equilibrium relationships, with financial development and trade openness positively affecting gross domestic product (GDP) growth, while renewable energy exhibits an unexpected negative coefficient. The non-linear autoregressive distributed lag estimates uncover asymmetries, with larger GDP contractions from downside shocks in financial development and trade openness. Renewable energy shows growth penalties from negative changes but symmetric upside benefits. The results highlight the importance of well-developed financial systems, strategic renewable investments, and trade integration for sustainable growth. Policymakers should focus on financial reforms, renewable project facilitation, and reducing trade barriers, considering asymmetric impacts. This study contributes novel empirical evidence on asymmetric dynamics among these variables in D-8 countries, extending the literature through recent non-linear panel modeling techniques and demonstrating the merits of accounting for asymmetries. The combination of methods offers a robust and fresh perspective.

Suggested Citation

  • Ali Umar Ahmad & Atiku Muhammad Abubakar & Nabil Ahmed Mareai Senan & Uzairu Muhammad Gwadabe & Badamasi Sani Mohammed & Maikudi Muhammad & Abdulrahman Mohammed Hasan AL-Yazidi & Bashir Yakubu Sani & , 2024. "Examining the Asymmetric Effects of Renewable Energy Use, Financial Development, and Trade Openness on Economic Growth in D-8 Islamic Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 125-139, July.
    • Handle: RePEc:eco:journ2:2024-04-12
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    More about this item

    Keywords

    D-8 Islamic Countries; Economic Growth; Financial Development; Renewable Energy; Trade Openness;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies

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