Model

We investigate the influence of the set of different policy measures on subsequent investments into RE capacity by institutional investors. The components of this model are shown in Figure 15.

Figure 15 — Model for the quantitative panel regression

The five different subsets of policies include 957 different (countries and time series generated) measures of which some are active in every sector, while some are active in a single sector only. The included variables are log-transformed to correct for the skewed distribution of both dependent and independent variables (Hair, 2010). We expect to see a positive influence for every subset of policies on the capacity additions (see Figure 15).

Dependent variable (D V)

The dependent variable, drawn from BNEF, for the overall model is measured as aggregated newly installed capacity (in MW) in a certain country and year in a specific subsector (e.g. solar, wind, biomass). We use capacity indicators as they are seen as the most accurate proxy for the deployment of a technology (Popp et al., 2011).