The Relationship Between Renewable Energy, Economic Growth and Trade Openness: New Evidence for EU Countries

Abstract

Using panel data analysis, the study analysed the relationship between renewable energy consumption, economic growth, and trade openness for the 27 European Union (EU) member states with the highest energy imports from 1990-2021. The country-specific causality test results showed a unidirectional causality from renewable energy consumption to economic growth in Belgium, Finland, and Italy. However, in Croatia, Greece, Ireland, the Netherlands, Portugal, and Romania, a unidirectional causality was found from economic growth to renewable energy consumption. A bidirectional causality between renewable energy consumption and economic growth was identified in Germany. The causality test results also indicated a unidirectional causality from renewable energy consumption to trade openness across the panel.