Impact of Trade and Financial Globalization on Renewable Energy in EU Transition Economies: A Bootstrap Panel Granger Causality Test

• Main Authors: Yilmaz Bayar, Mahmut Unsal Sasmaz, Mehmet Hilmi Ozkaya
• Format: Article
• Language: English
• Published: MDPI AG 2021-12-01
• Series: Energies
• Subjects: trade globalization; financial globalization; CO₂ emissions; real GDP per capita; renewable energy; bootstrap panel Granger causality
• Online Access: https://www.mdpi.com/1996-1073/14/1/19

The globalized world has experienced significant environmental degradation together with raising global production and population. In this context, the employment of renewable energy use has become crucial for a sustainable environment and development. In the research, the mutual causality among renewable energy, trade and financial globalization, real GDP per capita, and CO₂ emissions in EU transition economies experiencing the integration with global economy was explored through bootstrap panel Granger causality test for the period of 1995–2015. The causality analysis revealed a unilateral causality from trade globalization to renewable energy in Estonia, Latvia, and Slovenia, and from renewable energy to trade globalization in Croatia and Lithuania. However, no significant causality between financial globalization and renewable energy was revealed. On the other side, a unilateral causality from CO₂ emissions to renewable energy in Lithuania and Slovenia, and from renewable energy to CO₂ emissions in Czechia, Hungary, and Latvia and a reciprocal causality between renewable energy to CO₂ emissions in Romania and Slovakia and a unilateral causality from real GDP per capita to renewable energy in Czechia, Romania, and Slovenia was discovered in the causality analysis.