The Relationship Between Renewable Energy Consumption and Economic Growth in France: a Necessary Condition Analysis
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The Relationship Between Renewable Energy Consumption and Economic Growth in France: a Necessary Condition Analysis Sami Ben Jabeur 1 Received: 5 August 2018 / Accepted: 9 August 2019 # Springer Nature Switzerland AG 2019
Abstract This study offers a novel analytical approach on the relationships between renewable energy consumption, capital, labor force, new firm formation rate, and economic growth. It aims to investigate such causal relationships using different estimation techniques such as the ordinary least squares (OLS) model, dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS), and canonical cointegrating regression (CCR), along with necessary condition analysis (NCA), which are applied to data for France over the period 1987–2017. Our results show that all necessary conditions yield outcomes ranging from small- to large-sized effects on economic development. The French government should readdress its efforts towards encouraging more beneficial investments in renewable energy consumption. This study opens up new insights for policymakers to maintain environmental protection and ensure sustainable economic growth. Finally, the use of NCA reduces complexity and allows a better understanding of the relationships involved. Keywords Necessary condition analysis . Economic growth . Renewable energy . New firm formation rate
1 Introduction Renewable energy is an essential element for both economic development and the environment. As argued by Andreas et al. [6], it is an indispensable factor in sustaining and increasing the level of economic growth of a country. In its 2030 strategy, the European Union (EU) has decided to reach a target of 27% renewable energy in its global energy consumption. Furthermore, France envisages that renewable energy sources will account for at least 32% of its gross electricity consumption by the year 2030. Moreover, in 2016, renewable energies in France represented roughly 15.7% of the worldwide energy use. The share of renewable energy has also increased to 57% [76]. This evolution induces a decrease in the commercial deficit and encourages investment to achieve lower CO2 emissions. Moreover, after the Paris Climate Change Conference in 2015, the French government became Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10666-019-09678-6) contains supplementary material, which is available to authorized users. * Sami Ben Jabeur [email protected] 1
Institute of Management of South Brittany, LEGO Laboratory, University of South Brittany, Vannes, France
a front runner among the EU member states aiming to promote climate change mitigation and a significant reduction in greenhouse gas emissions. In this context, the present study sets out to identify the necessary conditions concerning the prospects for renewable energy and French economic growth. Our article investigates the relationship between economic growth, renewable energy consumption, labor force, capital, and the new firm formation rate by using c
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