Non-linear threshold effect of financial development on renewable energy consumption: evidence from panel smooth transition regression approach

Raza, Syed Ali; Shah, Nida; Qureshi, Muhammad Asif; Qaiser, Shahzad; Ali, Ramsha; Ahmed, Farhan

doi:10.1007/s11356-020-09520-7

Cited by 91 publications

(48 citation statements)

References 81 publications

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“…All four financial development proxies positively impact renewable energy consumption and statically significant at a 1% level. Our findings affirm results of The long-run elasticities are computed based on the short-run elasticities obtained from Table 4 previous FD-REC study in 15 top renewable energy consumption countries (Raza et al 2020). We may therefore conclude that both banking sector development and capital market growth have substantially positive effects on renewable energy consumption.…”

Section: Resultssupporting

confidence: 88%

“…More recently, Razmi, Bajgiran, Behname, Salari, and Razmi et al (2020) have used ARDL model on a 25-year-long data from 1990 to 2014 to investigate and affirm positive relationship of stock market development and economic growth with REC in Iranian context. Raza et al (2020) used panel smooth transition regression method on yearly panel data ranging from 1997 to 2017, and affirmed that an increase in every indicator of FD results an increase in consumption of renewable energy, in the top 15 renewable energy consumer countries context. Anton and Nucu (2020), in a panel data of twenty-eight European Union countries, analyzed the effect financial growth on consumption level of renewable energy from year 1990 to year 2015.…”

Section: Financial Development and Renewable Energy Consumptionmentioning

confidence: 92%

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The impact of financial development and geopolitical risk on renewable energy consumption: evidence from emerging markets

Alsagr

Hemmen

2021

Environ Sci Pollut Res

149

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In the past three decades, the significance of large industrialized emerging economies has been highlighted. In terms of economic productivity and CO2 emissions, these markets play an important role in the global environment. Hence, to achieve global environmental needs, transition to renewable energy sources is essential. However, financial constraints along with geopolitical risks could act as possible barriers to the required transition. Thereby, in this paper, we aim to assess the impact of financial development and geopolitical risk on renewable energy consumption in emerging markets from 1996 to 2015. A two-step system GMM is tested, revealing a positive significant effect of financial development on transition to renewable energy. Moreover, contrary to the expected negative effect of geopolitical risk, our results reveal significant positive effect of geopolitical risk on renewable energy consumption. We highlight that the effects of both financial development and geopolitical risk are more pronounced in the long run. Finally, imperative policy implications are highlighted.

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Section: Resultssupporting

confidence: 88%

Section: Financial Development and Renewable Energy Consumptionmentioning

confidence: 92%

The impact of financial development and geopolitical risk on renewable energy consumption: evidence from emerging markets

Alsagr

Hemmen

2021

Environ Sci Pollut Res

149

View full text Add to dashboard Cite

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“…Financial development has been recognized as a major factor affecting energy consumption (Raza, et al [80,81]). A country decides to expand its financial institution operations, including banking, foreign direct investment, and the stock market [82].…”

Section: Financial Development and Renewable Energy Consumptionmentioning

confidence: 99%

Nexus between Economic Policy Uncertainty and Renewable Energy Consumption in BRIC Nations: The Mediating Role of Foreign Direct Investment and Financial Development

et al. 2021

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In recent literature, the impact of economic policy uncertainty (EPU) on macro aspects have been investigated, but the aspect of energy, precisely renewable energy still to explore. The motivation of the study is to produce fresh evidence regarding the nexus between EPU and renewable energy consumption (REC) with the mediating role of forcing direct investment (FDI) and financial development (FD) in BRIC nations for the period 1997q1–2018q4. The study applied unit root tests following Ng-Perron and Zivot and Andrews for detecting variable’s stationary properties. The long-run cointegration was evaluated by implementing Bayer, Hanck combined the cointegration test, Bound testing approach, and tBDM test. Both linear and non-linear ARDL were implemented to evaluate long-run and short-run shocks, and directional causality was assessed through a non-granger causality test. Furthermore, the study implemented robustness by implementing fully-modified OLS, dynamic OLS, and canonical cointegrating regression (CCR). Unit root test established the variables are stationary after the first difference; moreover, the Bayer and Hanck cointegration test confirmed the long-run association between EPU, FD, FD, and REC in BRIC nations. Accruing to ARDL estimation, adverse effects running from EPU to REC both in the long run and short run. Furthermore, the positive statistically significant linkage revealed for FDI and FD to REC implies that clean energy integration could be augmented with continual inflows of FDI and development of the financial sector. Model estimation with asymmetric assumption, the study documented asymmetric effects running from EPU, FDI, and FD to renewable energy consumption, especially in the long run. Finally, the directional causality revealed unidirectional causality between REC and EPU, whereas the feedback hypothesis was disclosed for FDI and REC] and FD and REC. Study findings postulated that the role of foreign direct investment and financial development is critically significant because technological advancement and capital investment augment clean energy integration through the application of renewable energy.

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“…This combined equation is used as the estimation equation of this research. The generalized threshold panel model has been extensively used in the field of energy consumption, renewable energy development, carbon emission, regional technological innovation level on sustainable development [48][49][50][51][52][53].…”

Section: Methods and Datamentioning

confidence: 99%

Population Density or Populations Size. Which Factor Determines Urban Traffic Congestion?

Chang

Lee

et al. 2021

Sustainability

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A large number of articles have documented that as population density of cities increases, car use declines and public transit use rises. These articles had a significant impact of promoting high-density compact urban development to mitigate traffic congestion. Another approach followed by other researchers used the urban scaling model to indicate that traffic congestion increases as population size of cities increases, thus generating a possible contradictory result. Therefore, this study examines the role of both density and population size on traffic congestion in 164 global cities by the use of Stochastic Impacts by Regression on Population, Affluence and Technology model. We divide 164 cities into the two subgroups of 66 low density cities and 98 high density cities for analysis. The findings from the subgroups analysis indicated a clear-cut difference on the critical role of density in low-density cities and the exclusive role of population size in high-density cities. Furthermore, using threshold regression model, 164 cities are divided into the two regions of large and small population cities to determine population scale advantage of traffic congestion. Our findings highlight the importance of including analysis of subgroups based on density and/or population size in future studies of traffic congestion.

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Non-linear threshold effect of financial development on renewable energy consumption: evidence from panel smooth transition regression approach

Cited by 91 publications

References 81 publications

The impact of financial development and geopolitical risk on renewable energy consumption: evidence from emerging markets

The impact of financial development and geopolitical risk on renewable energy consumption: evidence from emerging markets

Nexus between Economic Policy Uncertainty and Renewable Energy Consumption in BRIC Nations: The Mediating Role of Foreign Direct Investment and Financial Development

Population Density or Populations Size. Which Factor Determines Urban Traffic Congestion?

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