The asymmetric impact of renewable energy consumption on the economic growth of emerging South and East Asian countries: A NARDL approach

Abstract

The question of economic development is so essential that specialists, international leaders, and every government are continually working on how to tackle this problem. Renewable energy is a means to save planet’s ecology and foster long-term economic viability. This study explores the asymmetric effect of renewable energy consumption (RE) on emerging South and East Asian countries’ economic growth by the non-linear autoregressive distributed lag (NARDL) approach. Also, it employs the generalized least square (GLS) method and panel causality test to grasp this impact. The GLS assessment exposes that positive and negative (P&S) mechanisms of RE positively influencing GDP while urbanization has an adverse influence. The PMG approach also delivers equivalent outcomes and authenticates the robustness of GLS results. The causality results provide relations between GDP and other variables. There is a conservation mechanism between the negative shock of RE consumption and GDP, while the positive shock of RE to GDP is observed from the feedback mechanism. We observed different interactions of CO2, P&S shocks of RE, and non-renewable consumption on GDP. These findings support policymakers of South and East Asian countries in formulating effective rules for their financial institutions regarding energy guidelines. In addition, considering P&S shocks from RE specifies that effective outcomes can be attained in economic growth while formulating energy guidelines.

Keywords

• Renewable energy
• Economic growth
• Asymmetric impact
• Causality