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This paper investigates the empirical relationship between carbon dioxide emissions, economic growth and energy use in post-communistic countries during 1990-2018. Pedroni's (1999 panel cointegration test discovered cointegrating relationship between the variables. To distinguish short-and long-term effect, as well as to account for homogeneity caused by previous common socio-political system and current country specific characteristics, Pesaran's et al. (1999) Pooled Mean Group estimator is employed. PMG estimates identified short-and long-term relationship between energy use and CO 2 emissions and short-term relationship between CO 2 emissions and economic growth. Finally, the Dumitrescu and Hurlin's (2012) Granger non-causality test for heterogeneous panels revealed bidirectional causality between CO 2 emissions, energy use and economic growth.

Current study sheds the light on the financial development-energy nexus in 32 Belt and Road economies during 2000-2015. Financial development is proxied by domestic credit to private sector. We first examine the order of integration by employing five different panel unit-root tests. Further, we confirm long-term relationship between the variables by running Pedroni and Kao panel cointegration tests. Fully modified ordinary least squares (FMOLS) regression reveal positive long-term relationship between financial development and energy use. Results of Dumitrescu-Hurlin panel causality test fail to reveal causal relationship between financial development and energy in our sample.

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