Long-run dynamics of green growth in Europe: Fresh insights from a bias-corrected Pooled Bewley estimator in heterogeneous panels

Engineering notes

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Chinese explanation / 中文解读

中文解读待补充：本站会优先为光伏效率、钙钛矿太阳能电池、储能技术、太阳能热利用、BIPV、并网技术等高价值论文补充中文说明。

Original abstract

This study examines whether renewable energy consumption (REC) constitutes a long-run driver of economic growth in Europe by analyzing a balanced panel of 34 European countries over the period 1990–2023. Covering major phases of Europe’s green transition—including the Kyoto Protocol, successive EU Renewable Energy Directives, the European Green Deal, and the post-crisis acceleration of energy-security policies—the study offers new evidence on the renewable energy–growth nexus in a heterogeneous and highly integrated regional setting. Methodologically, the analysis applies the Pooled Bewley estimator with finite-sample bias correction, complemented by Fully Modified Ordinary Least Squares, Dynamic Ordinary Least Squares, and Pooled Mean Group Estimator as benchmark estimators. This approach is particularly suitable for estimating common long-run relationships in dynamic heterogeneous panels with heterogeneous short-run dynamics and moderate time-series and cross-sectional dimensions. The empirical results are consistent with the green growth hypothesis. In the preferred specification, a 1% increase in REC is associated with a 0.042% increase in GDP per worker in the long run, with a 95% bootstrap confidence interval of [0.024%, 0.060%]. Capital accumulation remains the dominant growth driver, with a long-run elasticity of 0.410, while globalization exerts a positive and statistically significant effect, consistent with technology diffusion, policy convergence, and cross-border integration channels. Financial development is not robustly significant under the preferred estimator, suggesting that the growth effects of finance may depend on country-specific institutional depth, market structure, and green-investment capacity. The findings suggest that renewable-energy deployment contributes to growth most plausibly when combined with capital formation, infrastructure upgrading, and technology diffusion.

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