Heterogeneous effects of energy efficiency and renewable energy on economic growth of BRICS countries: A fixed effect panel quantile regression analysis

Despite the importance of energy efficiency (EE) in promoting economic growth (EG), the empirical evidence about the growth effect of EE is quite thin. This research intends to examine the heterogeneous impacts of EE, renewable energy consumption (REC), and other factors on EG of BRICS countries for 1990–2014. The empirical results unveil that EE in BRICS countries is an important source for EG. The findings of fixed-effect panel quantile regression analysis clearly explain that the effects of all the selected components of EG are heterogeneous along the quantiles. The effect of EE is significantly positive across all the quantiles, but the positive effect is more robust at 50th and 60th quantiles of EG. REC significantly decreases the EG in BRICS economies, but the negative influence is more robust at the upper quantiles of EG (0.60–0.90). Moreover, the results obtained from Dumitrescu-Hurlin (D-H) heterogeneous panel causality test approve the feedback hypothesis between EE and EG in BRICS countries. The findings also provide the bidirectional causal relationship between REC and EG. Furthermore, a causal association is observed from EE to REC. It suggests that EE is also beneficial to enhance REC in BRICS countries. The study suggests that more prolific use of energy can stimulate EG in BRICS countries by improvement in EE and renewable energy (RE). •Heterogeneous impact of energy efficiency and renewable energy use on the economic growth of BRICS countries.•Fixed effect panel quantile regression analysis is used to capture the heterogeneous effects.•Energy efficiency is an important source of economic growth in BRICS countries.•The feedback hypothesis exists between energy efficiency and economic growth.