Renewable energy, social stability and economic performance: Panel data findings

The present study has been designed to analyse the economic, political and social factors affecting foreign direct investment (FDI) and gross domestic product (GDP) growth in 38 OECD countries between 1999 and 2023. The study employed the Arellano-Froot-Rogers and Driscoll-Kraay panel data analysis methodsThe present study analyses the impact of political stability, credit allocation, energy use, health expenditures and the unemployment rate on both foreign direct investment (FDI) and gross domestic product (GDP) growth. The findings of the study indicate that political stability exerts a positive and significant influence on FDI. Conversely, the allocation of credit by the private sector has been demonstrated to exert a detrimental effect on the growth of GDP, thereby giving rise to concerns regarding the efficacy of credit allocation mechanisms. The utilisation of energy resources has been demonstrated to exert a favourable influence on the economic growth of a nation, thus establishing itself as a significant determinate of GDP growth. Furthermore, the negative impact of general government health expenditures on GDP growth indicates that the effective utilisation of these expenditures should be questioned. The unemployment rate was found to exert a positive effect on GDP growth, a phenomenon that may be attributable to structural unemployment or the informal economy. This study makes significant contributions to the extant literature and to the work of policy makers by analysing the effects of political stability, energy use and economic factors in detail.