Role of renewable energy and foreign direct investment toward economic growth in Egypt

Abstract

This investigation seeks to explore the influences of renewable energy and foreign direct investment (FDI) on Egypt's economy. Due to the function of FDI in promoting GDP expansion and renewable energy technology advancement, it is crucial to analyze the nexus between the economy, FDI, and green power. Egypt's annual data from 1990 to 2021 were employed in this research. By applying unit root tests, the data's stationarity was evaluated. The autoregressive distributed lag (ARDL) method was used to look into the connection between the variables in the long- and the short-run. Moreover, the reliability of the findings was reviewed using dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS), and canonical cointegration regression (CCR) methodologies. As per the ARDL conclusions, an intensification of 1% in both renewable energy usage and FDI will be responsible for a boost of 1.02% and 1.87% in GDP over the long term, moreover to an upsurge of 0.54% and 1.11% over the short run. These outcomes suggest appropriate suggestions for the Egyptian government toward equitable development through promoting sustainable innovation in energy, improving FDI, and advancing sustainable economic expansion.

Keywords

• Economic growth
• Renewable energy
• FDI
• Sustainable development
• Egypt