Import product diversification and renewable energy: a new appraisal from developed and developing countries

ABSTRACT

This study investigates the role of the import diversification in the renewable energy consumption for a global panel of both developing and developed economies. The study applies panel co-integration and panel quantile regression analysis on the panel data of 138 countries during 1995–2018. For empirical analysis, the authors used Pedroni) cointegration test and panel-quantile regressions. The investigation proves that the import diversification significantly reduces the renewable energy consumption and there is a major need for designing and implementing some revised and synchronized policies of trade with the energy mix and sustainable development goals. The empirical findings claim that the foreign direct investments, natural resources and GDP increase significantly boost the renewable energy demand for both groups of developing and developed countries. Therefore, this study shows that generally the current trade policies might be ineffective and import diversification policies should be reformed to match with the energy regulations, manufacturing, and sustainable development goals.

KEYWORDS:

• Import product diversification
• renewable energy
• developed countries
• developing countries
• panel co-integration analysis
• panel quantile regression

Acknowledgments

The authors notice that they have no known competing financial interests or personal relationships that may have affected the work reported in this article. No funding was received for this research study. Datasets used during the current study are available on demand.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Research highlights

1. Panel data of 138 developing and developed countries is analyzed over 1995-2018.

2. Import diversification policies can help to overcome energy security issues.

3. Energy prices significantly enhance renewable energy consumption.

4. Foreign investments and income positively influence the renewable energy consumption in developing and developed economies.

Notes

¹ Countries are categorized based on United Nations World Economic Status and Expectations (2018). The list of countries is reported in Appendix 1.

² Higher value of IMP implies a higher diversification in import product.

³ Countries are categorized based on United Nations World Economic Status and Expectations (2018). The list of countries is reported in Appendix 1.

4 Higher value of IMP implies a higher diversification in import product.