Role of Research and Development Budgets and Socio-economic Conditions for Greener Energy Transition in Emerging Economies: Do Internal and external conflicts matter?

Abstract

In the contemporary times, with the major conflict of the Russo-Ukrainian War, the global economies are facing several challenges and disputes in various economic, energy, and financial sectors. Still, policymakers and scholars are concerned about exploring factors affecting greener energy. The present study examines the impact of research and development (R&D) budgets, financial globalization and socio-economic conditions on greener energy adoption. Besides, this study considers the role of internal and external conflicts on greener energy adoption in the "Emerging Seven" economies during the period 1990-2020. Using various diagnostic and cointegration tests, the results revealed the presence of cross-sectional dependence, heterogeneous slopes and a longrun equilibrium relationship. This study employes panel quantile regression and finds that R&D budgets, financial globalization, socio-economic conditions and internal and external conflicts significantly promote greener energy adoption. Still, the influence of socio-economic conditions is inconsistent across quantiles. Using the autoregressive distributed lag model as a robustness measure, this study validates the positive impact of variables on greener energy adoption, except external conflicts. However, all the variables adversely influence greener energy adoption in the short run. The empirical results also validate bidirectional and unidirectional causal associations of the variables. Following the results, this study recommends further enhancement in the R&D budgets and financial globalization and limiting conflicts in emerging economies.