Policy bundling for petro‐state transitions: Firm‐level impacts of renewable energy support

Abstract This study analyzes how government support drives socio‐economic benefits during renewable energy transitions in fossil‐fuel‐dependent economies, using Saudi Arabia's Vision 2030 as a strategic case. Employing dynamic fixed effects, system GMM, and Vector Autoregression models on panel data from 42 renewable energy firms (2012–2024), we find that bundled post‐2016 support—financial aid, regulatory frameworks, and localization mandates—amplified outcomes. Financial support boosted renewable capacity and reduced fossil fuel imports; regulatory strength delivered sustained energy poverty reduction; and localization spurred job creation despite initial carbon costs, with regulatory and localization impacts proving slower but more durable than financial stimuli. Key policy implications highlight the necessity of coordinated policy bundling under a unified vision for petro‐states, regulatory precision for equitable poverty reduction, complementary SME measures for inclusive growth under localization mandates, and sequencing that accounts for differing impact timelines, affirming the state's critical role.