Unveiling the Nonlinear Dynamics of Renewable Energy and Economic Growth in Saudi Arabia: A Combined Threshold and Quantile Regression Analysis

This study investigates the relationship among renewable energy, industrialization, entrepreneurial activity, and real GDP growth in Saudi Arabia within the framework of Vision 2030. Annual data covering the period 1990–2021 are analyzed using threshold regression and simultaneous quantile regression to examine potential regime changes and heterogeneous associations across different growth conditions. The threshold analysis indicates a possible regime change associated with renewable-energy deployment at approximately 0.610 GWh. However, the threshold is imprecisely identified, and the differences between the two regimes are driven mainly by industrialization rather than renewable energy. Renewable energy is not significantly associated with real GDP growth in either regime, and its estimated coefficient remains small and statistically insignificant across all examined quantiles. Industrialization exhibits the strongest positive association with growth, remaining statistically significant in both threshold regimes and throughout the estimated conditional distribution. Entrepreneurial activity shows only limited evidence of an association with growth. Overall, economic growth during the study period is more closely associated with industrial development than with renewable-energy deployment. Nevertheless, renewable energy expansion remains strategically important for energy diversification and environmental sustainability and may yield greater economic benefits when supported by industrial, technological, and entrepreneurial policies.