The role of R&D in the effectiveness of renewable energy determinants: A spatial econometric analysis

This study investigates the effects of renewable energy determinants on various renewable energy resources. The empirical results are based on data from 31 mainly Asia-Pacific countries observed from 2000 to 2018. Different diagnostic tests indicate the existence of spatial effects in the renewable energy model. The spatial Durbin model with the time-period and spatial fixed effects was selected for analysis. Scrutinizing empirical studies suggest a lack of theoretical consensus on how renewable energy determinants work. By examining how R&D affects different renewable energy resources, this study attempts to fill the research gap. In addition, the R&D environment is an important factor in determining the effects of GDP and the development of financial markets and institutions. R&D enhancement reduces the impacts of market expansion on hydropower; however, such effects are incremental for solar, wind, bioenergy, and geothermal energy resources. In an environment with a low level of R&D, financial development has positive effects on hydropower generation and negative impacts on other renewable energy types. However, the expansion of R&D expands reverses such effects gradually. The different results are obtained for different countries at different levels of R&D. Furthermore, trade openness has been a positive factor in the development of hydropower, solar and geothermal energy resources. The results also revealed the negative (positive) impacts of GDP per capita in neighboring countries with a higher (lower) level of R&D on the development of renewable energy of the origin country.