Renewable and fossil energy, terrorism, economic growth, and trade: Evidence from France.

Abstract To the best of our knowledge, there is no econometric study on the causal relationship between renewable or fossil energies and terrorism, nor on terrorism in France. This paper tries to fill this gap and considers other variables as economic growth and trade openness. The autoregressive distributed lag approach and Granger causality are used for annual data on France covering the period 1980–2015. The Wald test confirms the existence of long-run relationships between the considered variables. Granger causality reveals long-run bidirectional causalities between all the variables. Interestingly, in the short-run, there are unidirectional causalities running from renewable energy to terrorism, and from terrorism to trade openness, and there is bidirectional causality between terrorism and economic growth. Long-run parameter estimates show that more renewable energy consumption and more trade increase both terrorism and economic growth. However, economic growth reduces terrorism in the long-run and appears as a powerful tool to combat terrorism in France. In addition, France is recommended to continue encouraging the use of renewable energies, and at the same time, to make more diplomatic efforts to resolve political and military conflicts in the world, and particularly in the Middle East. Highlights • There is long-run bidirectional causality between renewable energy and terrorism. • There is long-run bidirectional causality between fossil energy and terrorism. • There is short-run unidirectional causality running from renewable energy to terrorism. • In the long run, renewables increase terrorism and economic growth. • In the long run, economic growth reduces terrorism and increases renewable energy. [ABSTRACT FROM AUTHOR]