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The Asymmetric Impact of Geopolitical Risk on Renewable Energy Investment: A Cross-Country Analysis

Authors: Ivanenko Liudmyla

Published: 2025-05-02 00:56:19.453

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Abstract

This paper investigates the asymmetric impact of geopolitical risk (GPR) on renewable energy investment (REI) across a panel of developed and emerging economies. While extant literature acknowledges the influence of political and economic stability on investment decisions, the nuanced and potentially asymmetric effects of GPR, particularly its upward and downward fluctuations, remain relatively unexplored in the context of renewable energy. Using panel data analysis and advanced econometric techniques, including non-linear autoregressive distributed lag (NARDL) models, we examine how positive and negative changes in GPR affect REI. Our findings reveal a significant asymmetric relationship, with negative shocks in GPR exhibiting a more pronounced and detrimental impact on REI than positive shocks. This asymmetry highlights the risk-averse nature of investors in the renewable energy sector and underscores the importance of stable geopolitical environments for fostering sustainable energy transitions. The implications of our research are significant for policymakers seeking to attract REI and promote energy security in an increasingly volatile global landscape.

Keywords

Geopolitical Risk, Renewable Energy Investment, Foreign Direct Investment, Political Instability, Energy Transition, Emerging Markets, Developed Economies, Panel Data Analysis, Asymmetric Effects.

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How to Cite

Ivanenko Liudmyla, (2025-05-02 00:56:19.453). The Asymmetric Impact of Geopolitical Risk on Renewable Energy Investment: A Cross-Country Analysis. JANOLI International Journal of Economics and Management Science , Volume MejgkunYNoDF1a6qqjpe, Issue 2.

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