The shadow economy-environmental quality nexus in OECD countries: empirical evidence from panel quantile regression

The influence of shadow economy, environmental policies and geopolitical risk on renewable energy: A comparison of high- and middle-income countries

Given the alarming rate of climate change and environmental degradation, major countries are seeking ways to curtail environmental damage and attain sustainability in the future. In the quest for a green economy, countries are motivated to adopt renewable energy that can assist in resource conservation and efficiency. Accordingly, this study examines the diverse effects of the underground economy, environmental policy strictness, geopolitical risk, gross domestic product, carbon emissions, population, and oil prices on renewable energy for 30 high- and middle-income countries from 1990 to 2018. The empirical outcomes based on quantile regression document significant variations across two country groups. For instance, for high-income countries, the shadow economy has a detrimental effect across all quantiles but it is statistically significant at the top quantiles. Nonetheless, the effect of the shadow economy on renewable energy is detrimental and significant statistically across all quantiles for middle-income countries. In the context of environmental policy stringency, the effect is positive across both country groups, though there is heterogeneity in outcomes. Geopolitical risk has a positive influence on the deployment of renewable energy for high-income countries but negatively impacts renewables for middle-income countries. As far as policy suggestions are concerned, the policymakers of both high- and middle-income countries need to take steps to constrain the growth of the shadow economy by adopting effective policy strategies. Policies need to be implemented for middle income-countries to reduce the unfavorable effect of geopolitical uncertainty. The findings of this study contribute to a better and more precise understanding of factors shaping the role of renewables whereby the energy crisis would be mitigated.

The role of energy security and economic complexity in renewable energy development: evidence from G7 countries

The development of renewable energy is receiving more attention as a result of environmental degradation and energy instability. Despite a large literature on the nexus between energy security, economic complexity, and energy consumption, there are few attempts to analyze the impact of energy security and economic complexity on renewable energy. This paper examines the heterogeneous impacts of energy security and economic complexity on renewable energy in G7 countries from 1980 to 2017. The estimated results obtained from quantile regression show that energy insecurity is a driving force of renewable sources although its impact is heterogeneous across the distribution of renewables. In contrast, economic complexity hampers the development of renewable energy with the size of impact decreasing as the renewable energy sector progresses. In addition, we find that income positively affects renewable energy while the role of trade openness varies across the distribution of renewable energy variable. These findings lead to valuable policy implications for G7 countries to develop renewable energy.