RENEWABLE ENERGY INVESTMENT AS A DRIVER OF ECONOMIC DIVERSIFICATION IN IRAQ: EVIDENCE FROM A VAR MODEL (2010–2024)
Ключевые слова:
Renewable Energy Investment, Economic Diversification, VAR Model, Iraq, Non-Oil GDP, Energy EconomicsАннотация
This study analyzes the effect of renewable energy investment on economic diversification in Iraq between 2010 and 2024. With annual data series, the study adopts a VAR model approach to evaluate the dynamic interrelationships among renewable energy investment, non-oil GDP, oil revenue, and economic growth. The empirical findings highlight a strong positive effect of renewable energy investment on economic diversification, measured using non-oil GDP. Moreover, the study observes a two-way causality between renewable energy investment and economic diversification, implying a dynamic that reinforces each other. According to impulse response function, a shock in renewable energy investment will positively affect non-oil GDP in the long run. Furthermore, variance decomposition analysis reveals that the share of renewable energy investment in economic diversification rises over time, whereas the impact of oil revenues diminishes. Overall, the study confirms the role of renewable energy investment in economic transition in Iraq.
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