Relative significance of determinants of foreign direct investment in wind and solar energy in developing countries – AHP analysis

Alexander Ryota Keeley, Ken'ichi Matsumoto

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)

Abstract

The importance of foreign direct investment (FDI) for the development of renewable energy in developing countries has been increasingly recognized. Numerous countries have created various measures to attract FDI in the renewable energy sector. This paper uses the analytical hierarch process to clarify the relative significance of the determinants in the location decisions of foreign wind and solar energy investors. A total of 18 determinants that are categorized into the macroeconomic environment, institutional environment, natural conditions, and renewable energy policy categories are used for the analysis. The results show that adding to the traditional determinants of FDI, including the macroeconomic environment, the institutional environment, and natural conditions, renewable energy support policies have the same or stronger influence as location determinants of FDI. The paper also points out that some of the traditional determinants, such as exchange rate volatility, access to land, and an efficient and transparent administrative procedure, are also very important as determinants of FDI in wind and solar energy. Policy implications focus on the determinants of FDI in wind and solar energy. The relative significance of the determinants clarified through this study offers criteria for prioritizing policies and actions for policy makers.

Original languageEnglish
Pages (from-to)337-348
Number of pages12
JournalEnergy Policy
Volume123
DOIs
Publication statusPublished - Dec 2018

All Science Journal Classification (ASJC) codes

  • Energy(all)
  • Management, Monitoring, Policy and Law

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