Effects of financial development, foreign direct investment, and economic growth on renewable energy consumption: Evidence from Czechia

Authors : Fergül Özgün

Pages : 1157-1180

Doi:10.58559/ijes.1698034

View : 53 | Download : 51

Publication Date : 2025-09-25

Article Type : Research Paper

Abstract :This study examines the effects of financial development, foreign direct investments (FDI), and economic growth on renewable energy consumption in Czechia. ARDL analysis was applied using data from the 1993-2023 period. Thus, we attempted to determine whether the short- and long-term effects of variables on renewable energy consumption differ. According to the analysis results, financial development decreases short-term renewable energy consumption and increases long-term renewable energy consumption. In the long term, economic growth also increases renewable energy consumption. Although the long-term effect of FDI on renewable energy consumption is positive, it is statistically insignificant. The model’s error correction mechanism works, and approximately 47% of the deviations occurring in the short term are balanced in the next period. Czechia’s emphasis on increasing financial development may help increase renewable energy consumption in the long term.
Keywords : Financial development, Foreign direct investment, Renewable energy consumption, ARDL

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