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The Economic Effects of Renewable Energy Investments: Evidence from Firm-Level Data

Author

Listed:
  • Noureddine Kerrouche

    (Department of Finance, College of Business Administration in Hawtat Bani Tamim, Prince Sattam Bin Abdulaziz University, Al-Kharj, Saudi Arabia)

  • Chokri Zehri

    (Department of Finance, College of Business Administration in Hawtat Bani Tamim, Prince Sattam Bin Abdulaziz University, Al-Kharj, Saudi Arabia)

Abstract

Companies’ Investments in Renewable Energy (CIRE) offer well-known environmental and social benefits, but their economic impact remains unclear, particularly at the microeconomic level. Using the Generalized Method of Moments approach, our empirical study of 93 companies in Saudi Arabia from 2000 to 2023 assessed CIRE’ effects on GDP growth, FDI inflows, employment, and exports. Our findings indicate that increased investments in renewable energy have significantly boosted GDP growth, attracted higher FDI inflows, and generated new employment opportunities, suggesting a favorable investment environment. However, the potential for export growth within this sector appears limited. Robustness checks and instrumental variables confirm these findings. The study provides policy recommendations for maximizing economic benefits from CIRE in Saudi Arabia.

Suggested Citation

  • Noureddine Kerrouche & Chokri Zehri, 2024. "The Economic Effects of Renewable Energy Investments: Evidence from Firm-Level Data," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 220-228, September.
    • Handle: RePEc:eco:journ2:2024-05-22
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    More about this item

    Keywords

    Energy; Saudi Companies; Investment; Economic Growth; Foreign Direct Investment;
    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
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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