Country-level governance and renewable energy consumption: evidence from global firms

Considering the growing emphasis on addressing climate change, country-level governance plays a vital role in the transition of renewable energy consumption across firms. Firms situated in countries with better governance frameworks are better able to transition toward renewable energy because of higher control of corruption, government effectiveness, political stability, regulatory quality, rule of law and voice and accountability. The purpose of the study is to examine the impact of country-level governance on renewable energy consumption in firms across 29 countries from 2010 to 2022. The results indicate that country-level governance plays a crucial role in the renewable energy consumption of firms. It is also found that country-level governance has a higher impact on renewable energy in the case of civil law countries compared to common law countries and countries with higher sustainability compared to lower sustainable countries. The paper also presents crucial policy implications, highlighting the importance of country-level governance in the adoption of renewable energy in firms at a crucial point where achieving sustainable development is prioritized by all countries.