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Fiscal Policy, Growth, Financial Development and Renewable Energy in Romania: An Autoregressive Distributed Lag Model with Evidence for Growth Hypothesis

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  • Marius Dalian Doran

    (Doctoral School of Economics and Business Administration, Faculty of Economics and Business Administration, West University of Timișoara, 16 Pestalozzi Str., 300115 Timişoara, Romania)

  • Maria Magdalena Poenaru

    (Department of Horticulture and Food Science, Faculty of Horticulture, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania)

  • Alexandra Lucia Zaharia

    (Department of Geography, Faculty of Sciences, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania)

  • Sorana Vătavu

    (Finance Department, Faculty of Economics and Business Administration, West University of Timișoara, 16 Pestalozzi Str., 300115 Timişoara, Romania)

  • Oana Ramona Lobonț

    (Finance Department, Faculty of Economics and Business Administration, West University of Timișoara, 16 Pestalozzi Str., 300115 Timişoara, Romania)

Abstract

This research aims to identify the influence of fiscal policy, financial development and economic growth on the increase of renewable consumption in Romania. To achieve our objective, we employ bivariate regressions through the Autoregressive Distributed Lag method, over the 2000–2020 period, to examine these influences. We find clear evidence that the variables observed (implicit tax rate on energy, external debt stocks, real GDP per capita, environmental tax revenues from energy taxes, and market capitalisation of listed domestic companies) have significant effects on the use of renewable energy. Four unidirectional causal relationships were identified in the long run: two from independent variables towards the dependent variable and two from the dependent variables towards two other independent variables. The importance of this study is that its results can contribute to the finding of the most suitable solutions to improve renewable energy consumption in Romania and mitigate the impact of climate change. Consequently, the results of this study reveal significant conclusions and policy recommendations for Romania moving towards sustainable and green economic growth, through a balanced set of policies and measures smartly applied, accompanied by a solid rate of absorption of green funds.

Suggested Citation

  • Marius Dalian Doran & Maria Magdalena Poenaru & Alexandra Lucia Zaharia & Sorana Vătavu & Oana Ramona Lobonț, 2022. "Fiscal Policy, Growth, Financial Development and Renewable Energy in Romania: An Autoregressive Distributed Lag Model with Evidence for Growth Hypothesis," Energies, MDPI, vol. 16(1), pages 1-18, December.
    • Handle: RePEc:gam:jeners:v:16:y:2022:i:1:p:70-:d:1010216
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