IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2024-05-22.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/16539/8138
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/16539
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    2. Shahbaz, Muhammad & Raghutla, Chandrashekar & Chittedi, Krishna Reddy & Jiao, Zhilun & Vo, Xuan Vinh, 2020. "The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index," Energy, Elsevier, vol. 207(C).
    3. Stamatios Ntanos & Michalis Skordoulis & Grigorios Kyriakopoulos & Garyfallos Arabatzis & Miltiadis Chalikias & Spyros Galatsidas & Athanasios Batzios & Apostolia Katsarou, 2018. "Renewable Energy and Economic Growth: Evidence from European Countries," Sustainability, MDPI, vol. 10(8), pages 1-13, July.
    4. Wei, Xiaobo & Mohsin, Muhammad & Zhang, Qiongxin, 2022. "Role of foreign direct investment and economic growth in renewable energy development," Renewable Energy, Elsevier, vol. 192(C), pages 828-837.
    5. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
    6. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    7. Buchanan, Bonnie G. & Le, Quan V. & Rishi, Meenakshi, 2012. "Foreign direct investment and institutional quality: Some empirical evidence," International Review of Financial Analysis, Elsevier, vol. 21(C), pages 81-89.
    8. Adams, Samuel & Klobodu, Edem Kwame Mensah & Apio, Alfred, 2018. "Renewable and non-renewable energy, regime type and economic growth," Renewable Energy, Elsevier, vol. 125(C), pages 755-767.
    9. Lehr, Ulrike & Lutz, Christian & Edler, Dietmar, 2012. "Green jobs? Economic impacts of renewable energy in Germany," Energy Policy, Elsevier, vol. 47(C), pages 358-364.
    10. Heru wahyudi & Widia Anggi Palupi, 2023. "What is the Short-term and Long-term Relationship between Renewable Energy and Investment in Economic Growth?," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 46-55, May.
    11. Rahman, Sajjadur & Serletis, Apostolos, 2009. "The effects of exchange rate uncertainty on exports," Journal of Macroeconomics, Elsevier, vol. 31(3), pages 500-507, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jian-Guang Shen, 2002. "Democracy and growth: An alternative empirical approach," Development and Comp Systems 0212002, University Library of Munich, Germany.
    2. ?gel de la Fuente, "undated". "Convergence Across Countries And Regions: Theory And Empirics," UFAE and IAE Working Papers 447.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    3. Zhang, Xiaobei & Wang, Xiaojun, 2021. "Measures of human capital and the mechanics of economic growth," China Economic Review, Elsevier, vol. 68(C).
    4. Rogers, Mark Llewellyn, 2008. "Directly unproductive schooling: How country characteristics affect the impact of schooling on growth," European Economic Review, Elsevier, vol. 52(2), pages 356-385, February.
    5. Michael S. Delgado & Daniel J. Henderson & Christopher F. Parmeter, 2014. "Does Education Matter for Economic Growth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(3), pages 334-359, June.
    6. Nunnenkamp, Peter, 1997. "Herausforderungen der Globalisierung für Brasilien," Open Access Publications from Kiel Institute for the World Economy 1705, Kiel Institute for the World Economy (IfW Kiel).
    7. Antonio Paradiso & Saten Kumar & B. Bhaskara Rao, 2013. "The growth effects of education in Australia," Applied Economics, Taylor & Francis Journals, vol. 45(27), pages 3843-3852, September.
    8. Kuo-Hsing Kuo & Cheng-Te Lee, 2017. "Economic Integration, Growth and Income Distribution," Australian Economic Papers, Wiley Blackwell, vol. 56(1), pages 59-71, March.
    9. Cécile Perret, 2011. "Des Modeles De Croissance Aux Theories Du Developpement Territorial Endogene : Vers Une Prise En Compte Du Capital Social," Working Papers hal-00995429, HAL.
    10. Hilary Steedman, 1996. "Measuring the Quality of Educational Outputs: A Note," CEP Discussion Papers dp0302, Centre for Economic Performance, LSE.
    11. Eric A. Hanushek & Ludger Woessmann, 2009. "Schooling, Cognitive Skills, and the Latin American Growth Puzzle," CESifo Working Paper Series 2667, CESifo.
    12. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    13. Maurer, Rainer, 1995. "OLS-Estimation of conditional and unconditional sigma- and beta-convergence of per capita income: Implications of Solow-Swan and Ramsey-Cass models," Kiel Working Papers 698, Kiel Institute for the World Economy (IfW Kiel).
    14. Kensuke Miyazawa, 2017. "Measuring Human Capital in Japan," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 13(3), pages 241-268, November.
    15. Xavier Sala-i-Martin, 2002. "15 Years of New Growth Economics : What Have we Learnt?," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(2), pages 5-15, August.
    16. Diaz-Bautista, Alejandro, 2002. "The role of telecommunications infrastructure and human capital: Mexico´s economic growth and convergence," ERSA conference papers ersa02p102, European Regional Science Association.
    17. Mulligan, C. B. & Sala-i-Martin, X., 1997. "A labor income-based measure of the value of human capital: An application to the states of the United States," Japan and the World Economy, Elsevier, vol. 9(2), pages 159-191, May.
    18. Shen, Jian-Guang, 2002. "Democracy and growth : An alternative empirical approach," BOFIT Discussion Papers 13/2002, Bank of Finland, Institute for Economies in Transition.
    19. Sarno, Lucio, 1999. "Stochastic growth: Empirical evidence from the G7 countries," Journal of Macroeconomics, Elsevier, vol. 21(4), pages 691-712.
    20. Valerio Mendoza, Octasiano Miguel & Borsi, Mihály Tamás & Comim, Flavio, 2022. "Human capital dynamics in China: Evidence from a club convergence approach," Journal of Asian Economics, Elsevier, vol. 79(C).

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2024-05-22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.