Nexus Between Hydropower, Nuclear Energy, and Economic Growth in China: Insights from a Simultaneous Equations Model

Abstract

Amid the global shift toward green development, clean energy is a key driver of sustainable economic growth. Based on China’s green transition, the study investigates the dynamic relationships between clean energy generation (hydro and nuclear) and economic development using panel data from 30 provinces (2013–2022). Applying simultaneous equation models to address endogeneity, the analysis reveals a significant bidirectional relationship between nuclear power generation and economic growth, however, hydropower generation and economic development exhibit no statistically significant mutual influence. Research and Development, Foreign Direct Investment and innovation are included as controls to enhance robustness. Findings offer theoretical and practical insights for optimizing China’s clean energy strategies and promoting sustainable development.