The Impact of Renewable Energy Consumption on Economic Growth in BRIC-T Countries: Panel Data Analysis

Abstract

The aim of this study is to examine the impact of renewable energy consumption on economic growth in BRIC-T countries (Brazil, Russia, India, China and Turkiye). In doing that, we consider gross fixed capital formation, trade openess, and foreignd direct investment as control variables. The Driscoll & Kraay estimator is used in the study in which both panel-wide and country-based analysis is performed using data for the period 1990-2020. According to the panel results, renewable energy consumption, trade openness and FDI variables are statistically insignificant. When countries are analyzed separately, the impact of renewable energy consumption on economic growth varies. Accordingly, it has a negative effect in China, India, Russia and a positive effect in Brazil and Turkiye. However, it is statistically significant only in India and Turkiye. In all countries, the increase in gross fixed capital formation has a positive effect on growth and is statistically significant. The effect of trade openness on growth is statistically significant in Brazil (positive), China (positive) and India (negative). FDI is statistically significant only in China and Turkiye. FDI affects growth negatively in China and positively in Turkiye.