Renewable and non-renewable energy consumption, foreign direct investment and economic growth in Saudi Arabia: Evidence from an Autoregressive Distributed Lag modeling approach

We are investigating the causal link amid renewable and non-renewable energy consumption, GDP, and foreign direct investment in Saudi Arabia. To achieve this goal, we suggest a modern approach to the symmetrical causality of Toda-Yamamoto for the period 1980–2021. Using the autoregressive distributed lag (ARDL) cointegration method was considered to identify the long and short-run dynamic relationships among variables under investigation. Initial empirical findings suggest a short-term bidirectional correlation among renewable and non-renewable energy consumption and GDP. Likewise, there is evidence of unidirectional causal relationships from GDP to foreign direct investment and from foreign direct investment to trade and both renewable and non-renewable energy consumption. The long-term causal link reveals unidirectional causal relationships from GDP to both renewable and non-renewable energy consumption, from foreign direct investment to GDP, and from non-renewable energy consumption to renewable energy consumption.