Energy Strategy Reviews 42 (2022) 100886

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Energy Strategy Reviews

journal homepage: www.elsevier.com/locate/esr

The dynamic association between different strategies of renewable energy

sources and sustainable economic growth under SDGs
Gang Wang a, Misbah Sadiq b, Taqadus Bashir c, Vipin Jain d, Syed Ahtsham Ali e, *,
Malik Shahzad Shabbir f
a
School of Economics, AnHui University of Finance and Economics, BengBu, China
b
Department of Management Sciences, Al-Qasimia University, United Arab Emirates
c
Department of Management Sciences, Bahria University, Pakistan
d
Teerthanker Mahaveer University, Moradabad, Uttar Pradesh, India
e
Business School, Shanghai Jianqiao University, Shanghai, China
f
Department of Management, Riphah International University, Pakistan

A R T I C L E I N F O A B S T R A C T

JEL classification: This study is trying to examine the different renewable energy sources and their impact on the economic growth
O11 at the state level under sustainable development goal seven (SDG-7). The SDGs goal (7th) defines the importance
O13 of clean, affordable and modern energy system in the World. Moreover, this study is attempting to increase the
Keywords: influence of sustainable energy consumption by employing dataset of selected Asian countries. This study uses
Sustainable energy consumption annual panel data set and applies Augmented Mean Group (AMG), alongside Common Correlated Effects Mean
Government expenditure
Group (CCEMG) methods for data analysis. The overall results indicate the consumption of renewable energy
AMG
Capital formation
sources have significantly contribution towards the economic prosperity of these economies. Furthermore, policy
Environmental friendly power makers should focus on expansionary fiscal policies to enhance the use of environmental friendly power gen­
eration in these regions.

1. Introduction
It is observed that there have been multiple previous attempts to
explore the linkage between energy consumption (EC) and economic
growth (EG) around the globe. It is somewhat surprising that researchers
do not reach at a definite consensus regarding the role of EG due to
existing of mix evidences on the causality direction. Some researchers
indicated uni-directional [1–3], while others indicated bi-directional
causality [4–8] among these variables. Several researchers have dis­
cussed the positive relationship among EG and EC. However, the results
vary under different contexts and methodologies. For instance, Kong­
kuah et al. [9] utilized the data of OECD economies and confirmed the
positive linkage among these variables. Balcilar et al. [10] also revealed
the similar findings for the case of G-7 economies. You et al. [11]
confirmed the positive affiliation between EG and EC for the case of
China. The findings of this study also indicated the bi-directional rela­
tionship between EG and EC. Umurzakov et al. [12] conducted their
research on post-communist economies during 1995–2014 in order to
test the casual relationship among EG-EC nexus. This study applied
Dumitrescu and Hurlin granger causality test to access the direction of
causality. Results stated there exists Uni-directional causality running
from EG to EC. Al-mulali et al. [13] confirmed bi-directional causality
between EG and EC after applying Canonical cointegration regression.
However, Narayan and Popp [14] conducted their research on G-6
and G-7 economies to scrutinized direction of casualty between EG and
EC. After employing granger causality test, their study found two-way
causal relationship between EG and EC for the case of G-7 economies,
while one-way causal relationship for the case of G-6 economies.
Reviewing the above literature, it is difficult to make a conclusion
regarding EG-EC nexus. Hence, there is a need to re-explore this linkage
by incorporating some additional variables and by employing advanced
econometric techniques. The energy-growth nexus postulates three hy­
potheses, i.e., growth, conservation, feedback and neutrality hypothesis.
Primarily, the energy and economic growth nexus studies mostly
used time series data but due to drawback of unit root and cointegration
in terms of properties of small data size made it more criticize able. Thus,

* Corresponding author.
E-mail addresses: dr.researchers@gmail.com (M. Sadiq), doc.tbc.tabs@gmail.com (T. Bashir), vipin555@rediffmail.com (V. Jain), Brillpak@yahoo.com (S.A. Ali),
mshahzad786.pk11@gmail.com (M.S. Shabbir).

https://doi.org/10.1016/j.esr.2022.100886
Received 9 January 2022; Received in revised form 29 April 2022; Accepted 19 June 2022
Available online 30 June 2022
2211-467X/© 2022 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
G. Wang et al.
Pedroni [15] proposed the panel cointegration and unit root tests to
overcome the limitations of conventional tests. Additionally, Moham­
madi and Parvaresh [16], Belke et al. [17] and Lau et al. [18], used the
panel techniques (unit root and cointegration) to investigated the link
between energy and growth. The robust and reliable results are signif­
icantly achieved to examine the energy-growth nexus by using the panel
data techniques. The panel data is the combination of both time series
and cross section data analysis. The issue of small degree of freedom has
been solved by these panel data techniques by using latest econometrics
techniques, cointegration panel method of vector for heterogeneous, the
‘dynamic ordinary least squares’ and ‘full-modified ordinary least
squares’ are the important panel methods. The problem of serial cor­
relation and endogeneity can be resolved by applying these techniques.
Various studies used the structural breaks analysis to evaluate the
energy-growth nexus.
Chein et al [19] investigated the role of clean energy from renewable
sources, urbanization, and economic growth in determining the level of
GHG emissions from 1995 to 2018 for ten Asian States through a
cross-sectional autoregressive distributed lagged (CS-ARDL) model
Caglar et al. explored the impacts of information and communication
technologies (ICT), renewable and non-renewable energy consumption,
financial development and economic growth on the environment. The
results show that increased non-renewable energy consumption leads to
environmental deterioration while renewable energy consumption, ICT
and financial developments abate environmental deterioration.
Caglar found the role of fdi and renewable energy consumption in
growth-emissions nexus by using bootstrap ARDL modelling. Empirical
analysis results show only a few cointegration relationships between
variables exist Caglar et al. estimated the effects of economic growth,
renewable energy, biocapacity, and natural resources on the ecological
footprint within the framework of the Environmental Kuznets Curve
hypothesis. Empirical findings confirm that economic growth and bio­
capacity increase environmental degradation, while renewable energy
consumption helps reduce environmental damage.
Mert and Caglar analyzed the asymmetric short- and long-run causal
links between foreign direct investments and emissions The empirical
results confirmed an asymmetric causal relationship between positive
shocks of foreign direct investments and positive movements in emis­
sions in the short run as well as an asymmetric causal link between
negative and positive shocks of foreign direct investments and positive
emissions in the long run.
Caglar et al. examined the nexus between the trade openness, and
economic complexity in a carbon-income framework. Empirical findings
show that positive changes in trade openness and economic complexity
stimulate environmental quality. On the contrary, economic growth,
natural resources and public-private partnership contribute to environ­
mental degradation. Therefore, we didnot find any comprehensive study
on this topic, which particularly focus on these ten Asian countries
including Bangladesh, China, India, Indonesia, Japan, Malaysia,
Maldives, Nepal, Pakistan, and Vietnam for thirty one (31) panel annual
data set start from 1990 to 2020. The purpose of this study is to inves­
tigate the dynamic relationship between different renewable energy
sources (in general level and state wise level) and their impact on sus­
tainable economic growth of selected Asian economies.
This study uses different renewable energy strategies under the
domain of sustainable development goals number seven (7), the clean,
affordable and modern energy system. This study takes different
selected Asian countries as sample; in order to identify the particular
energy strategy is used in the selected countries and their influence on
aggregate economic development. This study uses panel annual data set
in order to better understand, which particular country boost its growth
level under different renewable energy sources among selected Asian
countries. For this purpose, this study addresses the following research
question; do renewable energy sources improve the clean environment
by enhancing economic prosperity among selected Asian economies?
2
Energy Strategy Reviews 42 (2022) 100886
2. Literature review
The economic growth and energy consumption nexus remains the
prime topic concern among researchers. The literature review reported
rich evidence on the positive relationship among these variables. As far
as the concern of causality, there exists the contradictory view of the
researchers. Several studies provide extensive literature on the devel­
opment of the economic and depletion of renewable sources of energy
[13,20–25]. There are several types of studies on the association be­
tween biomass energy and economic development, hydroelectricity
ingesting, and economic development [26] and the samples selected,
features of states explored, variables employed and quantitative
methods used.
Several academicians believe on the one-way causality while others
believe on two-way causality. For instance, Jebli & Youssef [27] con­
ducted their study on a panel of sixty nine (69) economies with the aim
to analyze the empirical relationship between information technologies
(IT), renewable and non-renewable energy sources. They applied
different econometric techniques to accomplish their proposed study
objective. Results of FMOLS and DOLS demonstrated the positive affil­
iation among the chosen variables. The results of Granger causality
depicted that there exists a unidirectional causality between IT and
non-renewable EC (i.e., from IT to EC), while bi-directional causality
between IT and renewable EC. Contrarily, Abidin et al. [28] conducted
their study on ASEAN economies and found bi-direction causality be­
tween IT and non-renewable EC. Zhang et al. [29] investigated the role
of free-trade on the consumption of renewable and non-renewable en­
ergy. For this purpose, study collected the data from one hundred and
eighty (180) economies ranging from (1990–2015). Study categorized
free trade into two broad groups: Trade tax and trade volume. Results of
the study revealed the positive and significant affiliation among these
variables. Rahman and Wahid [30] tested the dynamic linkage between
IT, EC and EG for the case of ASEAN and BRICS economies. Findings of
the study showed the positive contributions of IT and EC to the EG.
Results illustrated that there exists bi-directional causal relationship
between EC and EG. Summarizing above debate, it is crucial to
re-investigate trade-energy linkage to reach at a definite consensus
regarding their direction of casualty.
Various studies have determined the effect of FDI on EC and
concluded the positive affiliation between these variables. For example,
Sadorsky [31] used the sample of twenty two (22) nations from
emerging economies and found the positive affiliation between FDI and
EC for the period of 1990–2006. Similarly, Shahbaz et al. [32] also
confirms the long-run positive relationship between FDI, EC, and EG.
The findings of their study are based on the annual time-series data of
Tunisia. The study concluded that FDI provides the means to access the
energy. Study also pointed out the uni-directional causality among these
variables. Mahalik et al. [33] find the similar relationship for the case of
Saudi-Arabia during (1971–2011). Ulucak [34] tested the role of FDI
and globalization to the energy demand. Empirical results of the study
confirmed the positive relationship among the chosen variables for the
case of Pakistan. Yue et al. [35] did an interesting research. Authors
gathered the data from twenty one (21) transitional economies and
scrutinized the effect of different indicators of FDI on the EC. By doing
this, study confirmed that FDI affect EC in different ways i.e., study
found the positive connection between financial intermediation and EC,
while the negative connection between stock market development
financial openness and EC. Triangulating the discussion from above,
present study argues that the contributions of FDI to EC may vary under
different circumstances. Hence, there is a need to re-investigate this
nexus by incorporating different socio-economic factors in the model.
However, the economic policy uncertainty (EPU) and energy pro­
duction nexus received limited attention from the prior researchers.
Most of the researchers have explored the contributions of EPU on
renewable EC, instead of EC. Hardly few studies have been found in the
literature which reports the significant linkages among EPU and EC. For
G. Wang et al. Energy Strategy Reviews 42 (2022) 100886

instance, Shafiullah et al. [36] tested the impact of EPU on the con­ 3.1. Cross-sectional dependency exploration
sumption of renewable energy. After analyzing the monthly data of USA
from 1986 to 2019, the study reached at a conclusion that EPU nega­ The presence of cross - sectional dependency (CD) becomes one of
tively contributes to the renewable EC. Zhang et al. [29] find the similar the essentials reasons to evaluate before evaluating panel data equations
results for the case of BRICS economies. Lei et al. [37] tested the impact since it will influence the decision of acceptable econometric ap­
of EPU and FD on the production and consumption of renewable EC. In proaches. In 1980, Breusch & Pagan proposed the LM technique for the
this regard, the study utilized the data of China spanning from 1990 to default hypothesis of absence of cross-sectional reliance in panel data­
2019 and applied ARDL econometric technique to analyze the results. sets to investigate CD. The LM analysis, on the other hand, may not be
Findings of the study suggest the negative relationship among the cho­ appropriate for large panels cross-section units. To address this flaw,
sen studies variables. Pirgaip & Dinçergök [38] also confirms the Pesaran devised the CD test, which is relied on the given statistic:
negative affiliation between EPU and renewable EC for the case of G-7 √̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅ [ ]
economies. Summarizing the above literature, present study figures out 2T N− 1 ∑
∑ ρ 2ij − E (T − K)̂ρ 2ij
N (T − K)̂
CD = [ ] (2)
that EPU-EC nexus is a neglected aspect to the available body of N(N − 1) i=1 j=i+1 υar (T − K)̂ρ 2ij
knowledge. Hence, there is a need to conduct a study to explore the role
of EPU on EC. 2
where, ̂ρ ij is the interaction within each combination of residuals
derived via OLS estimation.
3. Methodology

This study examines the renewable energy (in general and by group) 3.2. Assessment for slope homogeneity
and determines the analysis at the state level. The purpose is to increase
the influence of sustainable energy consumption by employing dataset In 2008, Pesaran & Yamagata formulated the following measure
for selected Asian countries. This study uses annual panel data set start created by Swamy during 1970 in order to explore for Slope homoge­
from 1990 to 2020. The sample Asian countries of this study consist of neity:
(Bangladesh, China, India, Indonesia, Japan, Malaysia, Maldives, Nepal, ∑
n ′
′ Xi M τ Xi

Pakistan, and Vietnam). All the data set is obtained from “Energy In­
̃
S= ̂− ̃
( βi βWFE ) ̂− ̃
( βi βWFE ) (3)
σ̃i 2
formation Administration” (EIA) and “World Development Indicators”
i=1

(WDI), World Bank. whereas, WFE is a weighted fixed effect, Mτ is an indicator of an identity
There are six steps in the estimating process. To begin, we performed
matrix, and ̃
β is the regression coefficient of pooled OLS estimation. WFE
a cross dependency (CD) investigation. Next, we performed Pesaran and
is used to display the slope coefficient in of pooled estimator. Further­
Yamagata’s [39] slope homogeneity examination. Furthermore, after
more, σ̃i 2 signifies the assessment of σ 2i . Furthermore, the standardized
detecting cross-sectional dependence, we used Pesaran’s [40]
second-generation panel unit root checks, included cross-sectionally dispersion measurement Δ and dispersion statistics of biased-adjusted
augmented IPS (CIPS) test proposed by Pesaran [40] and covariate estimate Δadj are defined as follows:
augmented Dickey-Fuller (CADF) tests by Hansen We used Westerlund’s ( )
√̅̅̅̅ N − 1 s̃ − E(zit) )
[41] second-generational cointegration investigation to look at the Δadj = N √̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅ (4)
long-term association between the regressors and regressand. We used υar(zit )
Westerlund’s [41] second-generational cointegration investigation to ( )
look at the long-term association between the regressors and regressand. √̅̅̅̅ N − 1 s̃ –K
Δ= N √̅̅̅̅̅̅ (5)
To calculate output elasticity’s in the long run, we used the AMG esti­ 2K
mator postulated by Eberhardt and Bond in 2009. For robustness checks,
the AMG estimators and CCEMG [42] were adopted. After that, we used E(zit ) = K, and zit =
2K(T − K − 1)
(6)
Dumitrescu and Hurlin’s procedures to look at the dynamic association T +1
between the factors.
( ) 4. Results analysis
ln(Yt ) = λit + α ​ ln(Re − ht ) + ρln(Re st ) + α ​ ln(Re − wt ) + θln Re gt
+ ηln(Re bt ) + ν ln(Nret ) + μln(Govt ) + γln(TOt ) + ∅ln(Kt ) First, we looked on cross-sectional interdependence in our data
(1) because it affects the robustness of further estimation unless second-
generational methodologies aren’t applied. Put simply, we apply
where λit=Ln (A0egT). second-generational econometric approaches to get trustworthy long-
In the given model (3), “i” signifies the ith country, “t” means the run estimates if cross-sectional interdependence prevails. We
panel data time frame, λ addresses the constants; whereas the elasticity employed a CD examination to detect CD among the countries in this
coefficients of environmental friendly source of power in terms of study. The results from Table 1 demonstrate cross-sectional
biomass ln (Re_bt), geothermal ln (Re_gt), wind power ln (Re_wt), solar
pv ln (Re_st), hydropower ln( Re ht), Capital accumulation ln (Kt), Trade Table 1
openness ln ( TOt ), Public expenditure ln (Govt), non-renewable power Cross-sectional dependence analysis.
ln (Nret) is represented by ϑ, η, θ, σ, ρ, α, ∅, γ, and μ. As a data prepa­
Variables P- Value Coefficients Abs (corr) Corr
ration strategy, this inquiry divided the numbers of all variables by the
Lny 0.001 89.013*** 0.79 0.65
overall population to transform them to per capita expression. Carmona
ln( Re h) 0.003 19.098*** 0.39 0.44
et al. [43] divided the unit root test into two different parts i.e., natural ln(Re_s) 0.002 14.034*** 0.28 0.31
component (non-stationary) and cyclical component (stationary) to ln(Re_w) 0.001 13.012*** 0.49 0.34
evaluate the energy use-growth nexus. According to their study, the ln(Re_g) 0.000 11.091*** 0.40 0.39
relationship between energy and GDP growth are interrelated to each ln(Re_b) 0.007 3.610*** 0.26 0.28
ln(Nre) 0.002 24.998*** 0.59 0.51
other or bidirectional causality found between them. lnGov 0.001 53.120*** 0.51 0.49
lnTO 0.000 26.879*** 0.61 0.55
LnK 0.000 46.092*** 0.60 0.59

Notes: ***p < 0.001; p < 0.1, **p < 0.01, *p < 0.05.

3
G. Wang et al. Energy Strategy Reviews 42 (2022) 100886

interdependence in our sample size at the 1% significant level (p < Table 3

0.01). Then, using Pesaran and Yamagata’s technique from 2008, we The panel’s stationary properties Outcomes.
looked at the homogeneity (uniformity) of a slope. Variables CADF CIPS
Table 2 demonstrates that the null hypothesis (H0) of the uniform
Level Δ Level Δ
(homogeneous) slope is rejected at a 1% degree of significance, sug­
gesting that the presence of the gradient heterogeneity is valid. Proof ln( Re h) − 1.598 − 3.900*** − 1.700 − 4.501***
ln(Re_w) 1.560 4.100*** 1.707 − 5.098***
from Table 1 as well as Table 2 shows that traditional methodologies like
− − −
Lny − 1.980 − 3.802*** − 1.890 − 3.989***
PP, LLC and IPS are not fit in this research in view of cross-sectional ln(Nre) − 1.691 − 3.709*** − 1.790 4.009***
interdependence [40]. Thus, this study employed Pesaran’s [40] crea­ lnTO − 1.399 − 4.609*** − 1.390 − 3.998***
tive unit root appraisals for our sample countries, CADF and CIPS. ln(Re_g) − 1.491 − 3.991*** − 1.610 − 3.789***
ln(Re_s) 1.580 3.692*** 1.609 − 3.885***
Meanwhile, Table 3 displays that H0 of unit root could be acknowledged − − −
LnK − 1.590 − 4.469*** − 1.127 − 4.003***
at the level anyway could not be acknowledged at the first-differenced at ln(Re_b) − 1.029 − 3.098*** − 1.020 − 3.098***
which the p-esteem is under 1%, suggesting that the elements are just of lnGov − 1.809 − 4.698*** − 1.693 − 4.780***
request 1 - I (1) factors.
Notes: ***p < 0.001; p < 0.1, **p < 0.01, *p < 0.05.
We kept on finding their long-run relationship since every one of our
variable are linked of order one. We utilized the cointegration exami­
nation, which is centered on Westerlund’s [41] error correlation theory. Table 4
The results obtained from Table 4, this assessment kept on measuring Panel cointegration analysis.
the parameters over the long run. This study used the AMG estimator
Statistics Z-value Value P-value
[44], that gives unbiased, efficient and reliable estimates, grounded by
Pτ 3.001 17.009*** 0.001
the results introduced in Tables 1 and 2 − −
Gα − 4.500 − 12.001*** 0.002
Table 5 demonstrates that all the AMG estimator’s coefficients are Pα − 2.001 − 10.010*** 0.001
highly significant, and each of the variables like, lnGov, lnRe_g, lnRe_w, Gτ − 7.003 − 6.103*** 0.000
lnTo, lnRe_s, lnRe_h, lnK, and lnRe_b have a favorable impact on lny
(GDP per capita), aside from lnNre (nonrenewable energy) as it dem­
onstrates negative influence on GDP per capita. In long run, a 1% ascent Table 5
in nonrenewable sources of energy would drop GDP by 0.14pc and a 1pc Long run Empirical Estimation.
ascent in capital formation per capita supports GDP by 0.128pc,
Regressors CCEMG estimator AMG estimator
underscoring the meaning of capital for economic thriving.
The assessment’s robustness is affirmed by the MG and CCEMG Coef. t-stat. P –value Coef. t-stat. P -value

techniques illustrates in Table 5. The investigated coefficients are robust ln Re-b 0.039* 1.69 0.030 0.032* 2.09 0.068
as well as consistent with respects of their signs and extents. We ln Re-s 0.043*** 2.60 0.000 0.041*** 3.30 0.000
ln Gov 0.110*** 6.10 0.000 0.089*** 5.01 0.000
inspected the causality among the markers as well as assessing the co­
ln Re-g 0.043** 1.66 0.019 0.029** 2.16 0.038
efficients in the long-term by utilizing the MG, AMG and CCEMG as­ ln TO 0.029** 2.30 0.029 0.040** 2.20 0.028
sessors to give extensive rules for strategy ideas (Table 6). Nonetheless, ln Nre − 0.137*** 7.98 0.001 − 0.143*** 6.89 0.000
Table 6 displays that there is a feedback system set up for environ­ Ln K 0.129*** 8.06 0.000 0.128*** 5.98 0.000
CD-test 1.290 0.219 0.208 0.750
mentally friendly power use by type, Capital formation, GDP, Trade
ln Re-h 0.139*** 8.06 0.000 0.137*** 7.98 0.000
Openness, and Government expenditure. ln Re-w 0.128*** 5.02 0.001 0.125*** 4.99 0.000
Diagnostic
5. Results discussion RMSE 0.0178 0.0169
I (0) [0.001] – [0.001]

The findings of our study are similar to several studies, such as Ewing
et al. [45], Bilgili, Bildirici and Gokmenoglu, Tugcu and Topcu, Shabbir
et al. [46,47], Arif et al. [48], Yikun et al. [49], Jun et al. [50], Liu et al.
[4,5], Dai et al. [51], Saleem et al. [52], Sadiq et al. [53], Chen et al.
[19], Ge et al. [54], Yaqoob et al. [55], Cao et al. [56], Khan et al. [57],
Bilgili et al. [58], Bulut and Iglesi-Lotz [59], Chein et al. [19], Caglar
et al., Caglar, and Caglar et al. Moreover, Bilagi and Ozturk conducted a
study regarding bioenergy and economic growth from G7 countries with
similar results. Bildirici and Gokmenoglu examined the relationship
among environmental pollution, hydropower through panel data among
Notes: ***p < 0.00; p < 0.1, **p < 0.01, *p < 0.05; RMSE represents Root Mean
Squared Error; Root Mean Squared Error is indicated as RMSE and I (0) repre­
sents p-values for CADF analysis with H0: non-stationarity.
selected OECD economies (For detail please see: Tables 5 and 6).
Moreover, Ishaque’s study “Is it wise to compromise renewable energy
future for the sake of expediency? An analysis of Pakistan’s long-term
electricity generation pathways; ” Finally, the results of our study are
to some extent comparable with some of the foreign studies on this area
of research, for instance, Bilgili et al. [58], Li et al. [20], Arasu et al. [60]
and Muhammad et al. [22].

Table 2 6. Conclusion
Heterogeneous panel analysis.
Variables Δadj statistics Prob. Δ statistic Prob. This study is attempting to identify the dynamic association different
Lny 99.001*** 0.000 93.019*** 0.000 sources of renewable energy and economic growth from selected Asian
ln( Re h) 25.004*** 0.000 21.009*** 0.000 countries. This study takes annual panel data set for ten countries. All
ln(Re_s) 26.003*** 0.000 20.003*** 0.000 data has taken from WDI and EIA. The assessment of long-term impacts
ln(Re_w) 24.023*** 0.000 18.010*** 0.000
led by Augmented Mean Group (AMG), alongside Common Correlated
ln(Re_g) 22.008*** 0.000 17.021*** 0.000
ln(Re_b) 13.003*** 0.000 10.098*** 0.000
Effects Mean Group (CCEMG) assessors uncovered that there is a feed­
ln(Nre) 25.002*** 0.000 26.031*** 0.000 back mechanism for environmentally friendly power use by type, Cap­
lnGov 139.019*** 0.000 139.039*** 0.000 ital formation, GDP, Trade Openness, and Government expenditure in
lnTO 109.179*** 0.000 106.998*** 0.000 Asian countries. The growth-energy consumption nexus is widely dis­
LnK 121.200*** 0.000 119.992*** 0.000
cussed in the first category of the empirical works. The high economic
Notes: ***p < 0.001; p < 0.1, **p < 0.01, *p < 0.05.

4
G. Wang et al. Energy Strategy Reviews 42 (2022) 100886

Table 6
Results of causality Analysis.
Variables ln y ln Re_h ln Re_s ln Re_w ln Re_g ln Re_b Ln Nre ln Gov ln TO

ln y – 5.089*** 2.802*** 2.509*** 2.120*** 2.013*** − 5.020*** 2.207*** 3.408***

(14.098) (5.709) (5.078) (3.871) (5.020) (− 14.078) (4.090) (9.131)
ln Re_h 3.097*** – 3.091*** 2.700** 2.448*** 2.101*** − 4.078*** 3.349*** 3.489***
(11.303) (7.880) (6.219) (5.909) (5.211) (− 3.032) (9.290) (9.639)
ln Re_s 3.219*** 1.099*** – 2.899*** 2.098*** 2.728*** − 4.686*** 2.012*** 2.568***
(8.771) (3.229) (6.871) (4.119) (4.439) (− 7.128) (5.231) (6.871)
ln Re_w 3.110*** 2.799*** 1.901*** – 2.419*** 2.291*** − 3.077*** 2.210*** 3.099***
(7.087) (6.041) (2.609) (4.779) (2.118) (− 2.120) (3.708) (7.901)
ln Re-g 3.809*** 3.200*** 2.129*** 2.769*** – 3.989*** 2.916*** (2.234) 3.149*** 3.120***
(11.211) (7.669) (3.799) (6.901) (5.022) (9.778) (7.559)
ln Re_b 2.880*** 3.198*** 2.656*** 2.867*** 3.168*** – 3.103*** (3.608) 4.023*** 3.087***
(9.088) (7.233) (4.010) (3.901) (3.015) (2.870) (2.170)
Ln Nre 2.577*** 2.887*** 4.423*** 3.977*** 4.014*** 2.113*** – 7.221*** 5.078***
(8.465) (4.808) (3.777) (2.552) (8.042) (4.088) (5.832) (3.907)
ln Gov 8.020*** 5.109*** 2.099*** 4.439*** 3.879*** 2.157*** − 4.023*** – 4.319***
(27.200) (16.200) (5.331) (13.399) (8.609) (4.116) (− 4.078) (12.099)
ln TO 2.809*** 1.900*** 2.138*** 2.612*** 2.468*** 2.161*** − 5.078*** 2.577*** –
(6.700) (3.691) (4.019) (6.178) (5.109) (6.118) (− 4.113) (2.548)

Note: Z -statistic is Illustrated in parentheses (.); Whereas *** sign shows 1% level of significance for W-statistics.

growth level requires more energy sources and efficient utilization of Ahtsham Ali wrote conclusion and abstract parts and format the paper
energy can boost the level of economic growth. The nexus between as per journal requirements.
growth and energy has been employed by the various researchers and
they followed the previous literature in their empirical work. The overall
Declaration of competing interest
findings of this study reveal with these remarks that renewable energy
sources and positive and significant effect on economic growth level.
The authors declare that they have no known competing financial
Moreover, several countries use different strategies and sources of
interests or personal relationships that could have appeared to influence
renewable energy in their countries in order to get more benefits for
the work reported in this paper.
their nationals.

6.1. Policy recommendation
In this backdrop of increased environmental risk, officials in these
economies should intend to respond with an appropriate strategy of
expansionary (fiscal-related) methods. Strategy efforts should be inte­
grated toward reducing conventional energy sources in order to improve
economic growth. Furthermore, this study has own restriction since we
have emphasized in just on environmental friendly sources of energy
and macroeconomic factors.
6.2. Future directions and limitations
They depict higher growth rate as compared to the levered countries,
which are concerned more about their financial flexibility in future. The
results for the constrained economies are different than the developed
economies. On the other hand, unconstrained renewable energy sources
depict high profitability toward economies. Hence, it is concluded that
the key determinants of renewable energy sources strategies are pro­
ductivity, tax, and growth rate. In addition, future researchers are sug­
gested to enhance results by analyzing cross-sectional as well as time-
series data through different sample of countries. Finally, future explo­
ration may utilize conventional energy sources that explore the associ­
ation and impact on economic enlargement and compare the results by
employing the data for emerging and advanced countries.
Author statement
The authors have declared no potential conflicts of interest con­
cerning the research, and publication of this article. The authors have
not received any financial support for this research project. All the au­
thors have worked on this paper. The details of role of each author are as
below. Dr Gang Wang has completed the data analysis part, Dr Misbah
Sadiq completed the Introduction section, Dr. Vipin Jain completed the
Literature review section, Dr Taqadus Bashir wrote Methodology sec­
tion, Dr Malik Shahzad interpreted the data analysis section, Dr.
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