This research examines the long-run effects of energy-mix, trade openness and research and development on the economic output of G20 countries. We employ panel estimation techniques that account for heterogeneity and cross-sectional dependence across countries. The presence of a long-run relationship is established for almost all variables across countries. The findings are mixed with respect to long-run elasticities across countries. Trade openness and research and development are found to be the contributing factors in enhancing economic output for most of the countries. The increasing roles of renewable sources are prominent in Argentina, Germany, Indonesia, Italy, the Russian Federation, and the United States; while in Australia, Brazil, Canada, France, Japan, South Korea and Mexico, we find a negative relationship with output. Our findings suggest that the G20 group should continue promoting investment in research and development in energy sector, along with trade integration for sustainable development. The role of changing energy-mix is found to be different across the group.
- economic output
- heterogeneous panel