Navigating the Energy Transition: How R&D Investment and Governance Quality Drive Clean Energy in the MENA Region

This study explores the impact of R&D investment and governance quality on renewable energy (REN) adoption in the Middle East and North Africa (MENA) countries over the period 1995–2021. The analysis also considers the influence of financial development, foreign direct investment (FDI), and trade openness as control factors. Utilizing the fixed-effects technique, the regression estimates reveal a significant negative relationship between R&D investment and REN consumption. Conversely, governance quality shows a significant positive influence on REN consumption, suggesting that countries with better governance structures exhibit higher levels of renewable energy adoption. Furthermore, financial development has a positive impact on REN utilization, while the effect of trade openness is negative. The study underscores the significance of implementing transparent and efficient regulatory frameworks, supportive policies, and robust enforcement mechanisms to establish a favorable institutional environment for the transition toward cleaner energy sources in the MENA region.