Do renewable energy sources improve clean environmental-economic growth? Empirical investigation from South Asian economies

Abstract

This study investigates the causal relationship between renewable energy sources and clean environmental economic growth among South Asian economies. This study comprises the panel data sets for eight (8) South Asian countries, and data start from 2003 to 2017. This study implies a Hausman test to identify which particular tests are more suitable and selected a fixed effect test and granger causality test for effective analysis perspective. Moreover, this study further relies on the panel vector error correction model (PVECM) test to suggest for long-run relationship existence among variables. Furthermore, the evaluation of the panel and the dynamic ordinary least squares regression shows that the production of renewable energy has compelled an effect on economic growth. While other sources of energy for instance, hydropower, geothermal, wind, and solar, have valuable and considerable influence on the economic growth of South Asian economies. The results reveal with these remarks the existence of positive associations among productions of renewable energies, energy dependence, and gross domestic product per capita. The obtained results reveal that renewable energy sources show a momentous effect on the economic growth of South Asian economies.