The relationship between renewable energy consumption and trade openness: New evidence from emerging economies

Abstract

In this study, the relationship between trade openness, renewable and non-renewable energy consumption for "Top Emerging Countries of Bloomberg" in 1980-2015 period is investigated. The long-run relationship between panels is examined with Dumitrescu-Hurlin (2012) panel causality test, Westerlund (2006) panel cointegration test with multiple structural break and Pesaran (2006) CCE-MG cointegration estimator. According to findings, it was found that the use of non-renewable energy is the one of main reason for the increase in trade openness. In addition, the increase in the use of renewable energy was founded to be an important factor in decreasing the trade openness for these Emerging Countries. The results of the study provide valuable information on how to increase the use of renewable energy for a sustainable economy in the long term for decision-makers, as well as for investors on the future of energy-related investments.