Effects of Oil Price Volatility and Trade Development Intensity on Renewable Energy Consumption in Oil-Importing and Oil-Exporting Countries
Keywords:
oil price, trade development, renewable energy, innovationAbstract
This study aims to examine the effects of oil price volatility and trade development intensity on renewable energy consumption in major oil-importing and oil-exporting countries between 2001 and 2022. This research employs a comparative panel-data approach using annual data from 10 major oil-importing and 10 major oil-exporting countries over the period 2001–2022. Oil price volatility was estimated using the EGARCH model to capture asymmetric fluctuations in global oil markets. The main empirical analysis was conducted using the Generalized Method of Moments (GMM) to address endogeneity, serial correlation, and heteroskedasticity within dynamic panel structures. Stationarity was assessed using the Levin–Lin–Chu (LLC) unit root test, while the Kao cointegration test was applied to evaluate long-run equilibrium relationships among renewable energy consumption, trade development, oil price volatility, innovation, and human development. Additional diagnostic tests, including the Hansen J-statistic and Arellano–Bond AR(1)/AR(2) serial correlation tests, were applied to confirm model validity and instrument robustness. In oil-importing countries, trade development intensity, innovation, oil price volatility, and human development all exhibited positive and significant effects on renewable energy consumption, with strong dynamic persistence indicated by the lagged dependent variable. In contrast, for oil-exporting countries, trade development intensity and oil price volatility showed negative and significant effects, whereas innovation and human development positively influenced renewable energy consumption. The lagged dependent variable was also significant, reflecting structural inertia in renewable energy transition processes across both groups. All models passed diagnostic tests confirming instrument validity and absence of second-order serial correlation. The findings highlight fundamentally different renewable energy transition pathways between oil-importing and oil-exporting countries, shaped by structural dependencies, trade profiles, and exposure to oil market volatility.
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Copyright (c) 2026 Fatemeh Eghbal Manesh, Shahryar Nessabian, Mahmood Mahmoudzadeh, Alireza Daghighi Asli (Author)
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