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The Relationship Between Renewable Energy Consumption and Economic Growth in France: a Necessary Condition Analysis

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Abstract

This study offers a novel analytical approach on the relationships between renewable energy consumption, capital, labor force, new firm formation rate, and economic growth. It aims to investigate such causal relationships using different estimation techniques such as the ordinary least squares (OLS) model, dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS), and canonical cointegrating regression (CCR), along with necessary condition analysis (NCA), which are applied to data for France over the period 1987–2017. Our results show that all necessary conditions yield outcomes ranging from small- to large-sized effects on economic development. The French government should readdress its efforts towards encouraging more beneficial investments in renewable energy consumption. This study opens up new insights for policymakers to maintain environmental protection and ensure sustainable economic growth. Finally, the use of NCA reduces complexity and allows a better understanding of the relationships involved.

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  1. Institute of Management of South Brittany, LEGO Laboratory, University of South Brittany, Vannes, France

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Ben Jabeur, S. The Relationship Between Renewable Energy Consumption and Economic Growth in France: a Necessary Condition Analysis. Environ Model Assess 25, 397–409 (2020). https://doi.org/10.1007/s10666-019-09678-6

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