Politická ekonomie 2025, 74(5)  | DOI: 10.18267/j.polek.1509

Exploring the Impact of Export Diversification on Energy Mix Diversification: Role of Institutional Quality, Foreign Direct Investments and Research & Development

Muhammad Shahbaz, Cem Işik, Serdar Ongan, Bekhzod Kuziboev
Muhammad Shahbaz, Department of International Trade and Finance School of Management and Economics, Beijing Institute of Technology, Beijing, China; Centre for Sustainable Energy and Economic Development, Gulf University for Science and Technology, Hawally, Kuwait
Cem Işik (corresponding author), Department of Economics, Faculty of Economics and Administrative Sciences; Anadolu University, Eskişehir, Turkey; University College, Korea University, Seoul, Republic of Korea; Baku Eurasian University, Economic Research Centre (BAAU-ERC), Baku, Azerbaijan; Azerbaijan State University of Economics (UNEC), Clinic of Economics, Baku, Azerbaijan; Western Caspian University, Economic Research Centre (WCERC), Baku, Azerbaijan; Advance Research Centre, European University of Lefke, Lefke, Northern Cyprus, Turkey
Serdar Ongan, Department of Economics, University of South Florida, Tampa, USA
Bekhzod Kuziboev, Department of Economics, Urgench State University, Urgench, Uzbekistan; School of Business, Central Asian University, Tashkent, Uzbekistan; Department of Trade, Tourism and Languages, Faculty of Economics, University of South Bohemia, Èeské Budìjovice, Czech Republic

This research investigates the effects of export diversification (henceforth, EXD) on energy mix diversification for 26 European Union (EU) countries. To achieve this aim, we employ the quantile regression model and GMM estimator for 1995-2020. The primary objective of this study is to examine the complexity of these two crucial factors. At lower levels of diversification, EXD has a negative impact on energy mix diversification; however, this effect becomes positive at higher levels of diversification. This situation underscores the significance of considering this factor when formulating energy policies. Specifically, exploring strategies to increase EXD in countries with limited energy diversity may be necessary. On the other hand, promoting EXD in countries with abundant energy diversity can contribute to a more robust and sustainable energy sector. This finding emphasizes the necessity of adopting an integrated approach in developing and implementing energy and export policies. The quantile regression analysis using different quantiles (percentages) can ensure quantile-based customized policies and strategies between export and energy diversifications for EU policymakers. Therefore, EU policymakers should consider creating and implementing foreign trade and energy policies in a coordinated manner.

Keywords: Energy diversification, export diversification, EU countries, panel quantile regression, GMM, low-high quantiles
JEL classification: F14, F21, Q43, Q48

Received: November 24, 2024; Revised: March 28, 2025; Accepted: April 28, 2025; Prepublished online: February 2, 2026; Published: October 23, 2026  Show citation

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Shahbaz, M., Işik, C., Ongan, S., & Kuziboev, B. (2026). Exploring the Impact of Export Diversification on Energy Mix Diversification: Role of Institutional Quality, Foreign Direct Investments and Research & Development. Politická ekonomie, 74(5), 813-838. doi: 10.18267/j.polek.1509
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