Journey to Net‐Zero and Investment in Renewable Energy: Evidence From Developed and Developing Countries

ABSTRACT This study examines how geopolitical risk, high‐technology exports and the Paris Agreement shape investment in renewable energy across developed and developing economies. Drawing on structural contingency theory, we conceptualise renewable energy investment as a country‐level response to external contingencies and analyse a global panel of 100 countries from 2007 to 2021. Using OLS, fixed‐effects panel models, two‐step system GMM and dynamic Difference‐in‐Differences models, we find that Paris Agreement ratification has a positive effect on renewable energy investment, but only after a 3‐ to 4‐year onset period. Geopolitical risk is negatively associated with renewable energy investment in developed economies, whereas high‐technology exports have a positive and robust association in developing economies, particularly after Paris Agreement ratification. This study calls for heterogeneous net‐zero strategies to address the external disruptions and trade‐related challenges.