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Assessing the impact of FDI, CO2 emissions, economic growth, and income inequality on renewable energy consumption in Asia

Keyword(s)

Carbon Dioxide Emission , Economic Growth , Foreign Direct Investment , Renewable Energy Consumption

Author(s)

Muhammad Ali, Liu Xiaoying, Shahid Mehmood, Muhammad Asif Khan, Judit Oláh

Country(ies)

Asia

Publisher

Elsevier

Published Date

March 2025

Access

Open

DOI

https://doi.org/10.1016/j.esr.2025.101653

JOURNAL LINK

Affiliation
1. School of Business, Zhengzhou University, China
2. Department of Management Sciences, Faculty of Management Sciences and IT, Mohi-Ud-Din Islamic University Nerian Sharif, AJK, Pakistan
3. Department of Commerce, Faculty of Management Sciences, University of Kotli, AJK, 11100, Pakistan
4. John von Neumann University Doctoral School of Management and Business Administration, Kecskem´ et, Hungary
5. Faculty of Economics and Business, University of Debrecen, 4032, Debrecen, Hungary
6. Department of Trade and Finance, Faculty of Economics and Management, Czech University of Life Sciences Prague, Czech Republic

Abstract

This study analyzes the influence of foreign direct investment (FDI), economic growth (GDP), income inequality (II), and carbon dioxide emissions (CO2E) on renewable energy consumption (REC) in Asia from 1995 to 2020. This study seeks to elucidate the factors influencing renewable energy consumption in various economic and environmental circumstances across Asia. The study employs advanced econometric techniques, such as panel cointegration, cross-sectional dependency tests, quantile regression, and Dumitrescu-Hurlin causality tests, revealing significant relationships between the variables. The findings indicate that increased GDP and FDI promote REC, but income inequality and CO2 emissions have intricated context-sensitive impacts. This research emphasizes the need for specific policy interventions to promote renewable energy adoption, especially in countries with high inequality and CO2 emissions. These findings provide valuable insights for policymakers working towards sustainable energy transition in Asia.

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