The impact of renewable energy consumption on foreign direct investment: Examining the role of renewable energy sources

Farhan  Wahid; Noman  Shafi; Ahsan  Abbas; Muhammad Junaid  Bilal

Authors

Farhan Wahid M.Phil Scholar, Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan. Author
Noman Shafi Assistant Professor, Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan. Author
Ahsan Abbas Assistant Professor, Department of Government and Public Policy (GPP), National Defence University (NDU), Islamabad, Pakistan. Author
Muhammad Junaid Bilal PhD. Research Scholar, Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan. Author

Keywords:

Renewable energy consumption, Foreign direct investment, Sustainability and Technological innovation, Internal energy resources, World bank

Abstract

This research has been undertaken for the investigation of the association of the renewable energy consumption (REC) with the foreign direct investment (FDI) along with moderating effect of the renewable internal energy resources (RIFS). This study's prime objective is examining the influence of the REC on the FDI, and understanding how the RIFS impacts the REC and the FDI relationship. The data has been collected from the database of the World Bank for countries belonging to OECD for the period beginning from 2011 and ending in 2020. The results have been drawn by using STATA 17 software which show significant values for the regression test, the unit root tests and the GMM test. Furthermore, this research highlights that the RIFS moderates the relationship between the said variables and results show that when there is an involvement of the renewable sources of the energy, the REC’s effect on the FDI is moderated. Concludingly, it has been analyzed that the relationship of the REC with the FDI is significant while underscoring the RIFS’ role in the production of renewable energy. This study suggests that the RIFS in the energy sector can increase the FDI.

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