The Roles of Economic Freedom and Regulatory Quality in Creating a Favorable Environment for Investment in Energy R & D , Infrastructure, and Capacity

Sustainable investment in energy requires a favorable economic and regulatory environment. A random effects model (PLSestimations), using a four‐year panel, reveals the growth rate in real per capitaGDPforOECDnations as an increasing function of both economic freedom and regulatory quality. These results underscore the critical roles that economic freedom and regulatory quality play, directly and indirectly, in creating an environment conducive to sustainable investment in energyR&Dand infrastructure.