The relationship between renewable energy consumption and economic growth

Abstract

Purpose The purpose of this study is to investigate the relationship between renewable energy and economic growth of Bulgaria. Design/methodology/approach This study analyzes the relationship between renewable energy and economic growth of Bulgaria for the period 1990-2016, based on annual data, by using the Toda–Yamamoto analysis and Autogressive Distrubuted Lag (ARDL) bound test. This period is characterized by the democratization of the Balkans and several crisis cycles in Bulgaria. Renewable energy consumption (REC, percentage of total final energy consumption), renewable electricity output (REO, percentage of total electricity output) and economic growth (GDP constant 2010 US$) were used. The levels or differences of the variables that are stationary were investigated using the augmented Dickey–Fuller (ADF), Philips–Perron (PP) and Kwiatkowski-Philips-Schmidt-Shin (KPSS) unit root tests. Findings Three different results were obtained from this study. One showed that renewable energy consumption and renewable electricity output are the causes of economic growth. Another result of this study is that economic growth and renewable electricity output are the causes of renewable energy consumption. The last result is that economic growth and renewable energy consumption are not causes of renewable electricity output. There was no long-term relationship between variables. Research limitations/implications The ARDL and Toda–Yamamoto tests were used because of lack of data sets. Thus, it is estimated that there is no long-term relationship. Originality/value This study is an original work for Bulgaria, showing the results of the relationship between renewable energy and economic growth. In line with the results of this study, renewable energy projects related to Bulgaria can be predicted.

Revisiting the role of renewable and non-renewable energy consumption on Turkey’s ecological footprint: Evidence from Quantile ARDL approach

“…Especially after [18], several studies have emerged in the static and dynamic econometric analyses framework for different countries. For instance; [19,20,21,22,23,24] are some of these studies. However, findings from the empirical analysis show that the direction of causality differs from country to country.…”

The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index

“…Zhou and Li [43] confirmed the presence of the Environmental Kuznets curve (EKC) and growth hypothesis for 33 nations from 1990 to 2016. Can and Korkmaz [44] reported the validation of bidirectional causality between renewable electricity output, as well as renewable energy consumption and economic growth in the case of Bulgaria during the period of 1990-2016. Lee and Jung [45] reported that renewable energy consumption has a significant but negative impact on economic growth.…”

“…The empirical analysis shows the presence of a bidirectional causality relationship between the consumption of renewable energy and economic growth. This empirical evidence is consistent with current studies such as Kahia et al [72] for Middle East and North African (MENA) countries; Rafindadi and Ozturk [11] for Germany; Koçak and Şarkgüneşi [26] for Albania, Georgia, and Romania; Apergis and Payne [22] for Central American countries; Apergis and Payne [20] for 20 OECD countries; Lin and Moubarak [27] for China; Shahbaz et al [28] for Pakistan; Pao and Fu [53] for Brazil; Marinaş et al [48] for European economies; and Can and Korkmaz [44] for Bulgaria. Economic growth causes capital.…”

Renewable Energy Consumption and Economic Growth in Argentina: A Multivariate Co-Integration Analysis

“…This Malaysian study revealed that renewable energy have a positive and significant effect on economic well-being both in the short and long run. Can and Korkmaz (2018) focused on Bulgaria to in investigating the relationship between renewable energy consumption and economic growth. The finding from the ARDL model showed no existence of a long run relationship but Toda-Yamamoto causality results posited that renewable energy consumption and renewable electricity output causes economic growth.…”