Drivers of green growth in the Kingdom of Saudi Arabia: can financial development promote environmentally sustainable economic growth?

Abro, Asif Ali; Murshed, Muntasir; Mahmood, Haider; Musah, Mohammed Borhandden; Rahman, Ahsanur

doi:10.1007/s11356-022-23867-z

Cited by 32 publications

(6 citation statements)

References 80 publications

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“…It was found that, in the long run, financial development improves energy demand in Saudi Arabia [48]. A further study conducted in Saudi Arabia using a causality test confirmed that green growth slows the impacts of financial development and trade globalization [49]. Another study using Non-Linear Autoregressive Distributed Lag (NARDL) found that, in the long run, a positive shock in energy consumption and negative shocks in financial development stream CO2 emissions in Saudi Arabia [50].…”

Section: Review Of Empirical Studiesmentioning

confidence: 94%

Impact of Financial Development Shocks on Renewable Energy Consumption in Saudi Arabia

Elzaki

2023

Sustainability

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The demand for renewable energy is increasing globally due to concerns about climate change, pollution, and the finite nature of fossil-fuel resources, and renewable energy has been recognized as a significant factor in realizing sustainable development. The government of Saudi Arabia adopted the reduction in fossil-fuel subsidies policy as a financial motivation for supporting both the production and consumption of fossil fuels. Therefore, this study aims to investigate the influence and shocks of Saudi financial development indicators on renewable energy consumption (REC) and to examine the track of causality between financial development indicators and REC. The study covers the annual data period of 1990–2021 and applies the Basic Vector Autoregressive model (VAR), the Granger causality test, forecast-error variance decomposition (FEVD), and the impulse response function (IRF). In the short run, the VAR results indicate a positive and significant impact of stock price volatility and private credit on REC. The results of causality between REC and financial development indicators were conflicting. The Granger causality test shows significant causality running from stock price volatility and private credit to REC. The FEVD results reveal that REC variation is explained by its innovative shocks and has a positive response to shocks in financial development. The IRF results show that REC has a positive response to shock on private credit, liquid liabilities, and stock price volatility. Authorities can encourage investment in renewable energy consumption by providing financial incentives; also, governments can foster national and international partnerships between investors, policymakers, and industry stakeholders. Employing different determinants of financial development indicators and incorporating population factors in the REC function will be highly recommended for forming the renewable energy demand in Saudi Arabia. Conducting a micro-level analysis of specific sectors within renewable energy, such as solar, wind, and others, can provide actionable insights for policymakers.

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Section: Review Of Empirical Studiesmentioning

confidence: 94%

Impact of Financial Development Shocks on Renewable Energy Consumption in Saudi Arabia

Elzaki

2023

Sustainability

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“…For instance, this method can estimate causalities for short- , medium- , and long-term which make it easier to check whether causal properties are homogeneous or heterogeneous over time. The test statistic predicted wising the Breiturng–Candelon technique assumes the null hypothesis that the independent variable does not Granger causes the dependent variable (Abro et al, 2022).…”

Section: Model and Methodologymentioning

confidence: 99%

Does the depth of the Financial Markets matter for establishing Green Growth? Assessing Financial sector’s potency in decoupling Economic Growth and Environmental Pollution

2022

Self Cite

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China’s 2060 carbon neutrality agenda requires implementation of policies that can decouple its economic growth from environmental pollution. Consequently, establishing green growth in the Chinese economy is of utmost significance. Against this milieu, this study questions whether the depth of Chinese financial markets matters for establishing green growth in China. Besides, the green growth effects of renewable energy use, technological innovation, and urbanization are also examined. Accordingly, quarterly frequency data from 1990Q1 to 2020Q4 are utilized to perform econometric tests that accommodate structural break concerns in data. Overall, the findings reveal that the depth of the Chinese financial markets facilitates the prospects of greening the Chinese economy. Notably, deepening of financial markets is seen to initially inhibit green growth while stimulating it later on; thus, the financial markets’ depth-green growth nexus is evidenced to depict a U-shape. On the other hand, green growth in China is also found to be catalyzed by the renewable transformation of the Chinese energy sector and through technological innovation in the long-run. Conversely, urbanization is witnessed to inflict anti-green growth impacts. Furthermore, the causality analysis verifies bi-directional causal associations between renewable energy use and green growth while unidirectional causalities running from financial markets' deepening, technological innovation, and urbanization to green growth are also discovered. Therefore, it is recommended that China should try to persistently develop its stock and debt markets so that clean investment can be boosted to decouple economic growth and environmental pollution. Besides, it is also important to undergo renewable energy transition, develop clean technologies, and design low-energy urbanization strategies.

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“…However, gasoline prices mitigated CO 2 emissions with a low gasoline demand. Abro et al (2022) explored Saudi Arabia from 1972 to 2018 and found that financial development and globalization mitigated CO 2 emissions. Moreover, energy resource efficiency also helped to mitigate CO 2 emissions.…”

Section: Literature Reviewmentioning

confidence: 99%

Examining the Role of Women’s Labor Participation in CO2 Emissions in Saudi Arabia

Mahmood,

Tanveer

2024

IJEEP

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Women can play an active role in determining environmental quality, and Saudi women’s share in the labor market is increasing considerably. Women's participation is still low in the labor market, and their participation might affect the aggregated environmental situation. Therefore, we explore the effect of Women's Labor Participation (WLP) on CO2 emissions in Saudi Arabia from 1990 to 2022 by employing a cointegration technique. The Environmental Kuznets Curve (EKC) is tested and substantiated in the long run, but it is not verified in the short run. WLP raises CO2 emissions. Thus, women's labor market entry has environmental consequences. Moreover, trade openness also contributes to CO2 emissions over a long period of time. Nevertheless, its short-term impact is environmentally pleasant. The study recommends checking environmental problems out of WLP by developing gender-responsive environmental policies. So, gender equality and sustainable growth would be targeted simultaneously.

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Drivers of green growth in the Kingdom of Saudi Arabia: can financial development promote environmentally sustainable economic growth?

Cited by 32 publications

References 80 publications

Impact of Financial Development Shocks on Renewable Energy Consumption in Saudi Arabia

Impact of Financial Development Shocks on Renewable Energy Consumption in Saudi Arabia

Does the depth of the Financial Markets matter for establishing Green Growth? Assessing Financial sector’s potency in decoupling Economic Growth and Environmental Pollution

Examining the Role of Women’s Labor Participation in CO2 Emissions in Saudi Arabia

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