Crowdfunding and renewable energy development: What does the data say?

For the first time, this paper investigates the relationship between crowdfunding and renewable energy generation for a panel of 32 countries from 2013 to 2018. Applying the instrumental variable generalised method of moment, this study indicated that crowdfunding has a significant positive effect on renewable energy generation. Notably, 1% increase in crowdfunding raises renewable energy generation by 0.35%. Specifically, we also found that crowdfunding spurs the generation of solar energy (0.45%), wind energy (0.37%), and other renewable energy (0.30%) while having a neutral effect on hydroelectricity generation. The findings from the causality analysis showed that there is bi-directional causality between crowdfunding and renewable energy generation. Country-specific analysis indicated that China has the highest effect of crowdfunding on renewable energy generation, while the United Arab Emirates has the lowest effect. These findings suggest that policymakers need to advance crowdfunding development by promoting favourable regulations, social capital (trust), and internet infrastructure investment. Policies that advance renewable energy generation, such as subsidies, feed-in-tariffs, and technology procurement, are also recommended. Highlights: Examines the effect of crowdfunding on renewable energy generation. Use a panel of 32 countries from 2013 to 2018. Crowdfunding drives renewable energy generation. There exists bi-directional causality between crowdfunding and renewable energy generation. China has the highest effect of crowdfunding on renewable energy generation. NOVELTY STATEMENT: This study has, for the first time, measured the contributions of crowdfunding to renewable energy generation. The study has also demonstrated that there exists bi-directional causality between crowdfunding and renewable energy generation. Finally, this study has shown that China has the highest effect of crowdfunding on renewable energy generation.