Geopolitical risk and renewable energy consumption: evidence from a global firm-level study

Abstract

Purpose This paper aims to examine the impact of geopolitical risk (GPR) on the firm’s renewable energy consumption (REC) and to further examine whether this relationship varies for firms located in oil-importing and exporting countries, higher and lower energy diversification and emerging and developed countries. Design/methodology/approach Sample includes 2,008 firms across 29 countries globally, based on data availability. The study period is from 2014 to 2022. The study uses OLS with industry and year fixed effects. For robustness, alternative measures of dependent and independent variables are used and alternative tests are conducted to handle the issue of endogeneity. Findings The study finds that GPR has a positive impact on REC in firms. The study also found varying impacts for firms in oil-exporting and importing countries, countries with high and low energy diversification and emerging and developed countries. Originality/value Major studies examine the impact of GPR on REC across countries, but there is little attention given to the micro-perspective in a global scenario on how GPR affects firms’ REC across the globe.