Nexus between financial development, foreign direct investment, and renewable energy consumption: Evidence from SSA

Abstract

This study examines the nexus between urbanization (UR), gross capital formation (GCF), trade openness (TO), and renewable energy consumption (REC) to understand their interplay and implications for renewable energy adoption. Analyzing the data reveals a negative correlation between UR, GCF, TO, and REC, highlighting challenges in promoting renewable energy amidst urbanization, capital formation, and global trade integration. Policy interventions are crucial to address barriers hindering renewable energy uptake. Recommendations include incentivizing foreign direct investment, enhancing technology transfer, incentivizing clean energy investments, and promoting financial literacy. Integrated urban planning and alignment of capital formation policies with renewable energy goals are essential strategies to accelerate renewable energy adoption. This study offers valuable insights for policymakers and stakeholders seeking to promote renewable energy development and sustainability.