The Roles of Economic Freedom and Regulatory Quality in Creating a Favorable Environment for Investment in Energy R&D, Infrastructure, and Capacity

Sustainable investment in energy requires a favorable economic and regulatory environment. A random effects model (PLS estimations), using a four-year panel, reveals the growth rate in real per capita GDP for OECD nations as an increasing function of both economic freedom and regulatory quality. These results underscore the critical roles that economic freedom and regulatory quality play, directly and indirectly, in creating an environment conducive to sustainable investment in energy R&D and infrastructure.