The effect of financial development on renewable energy demand: The case of developing countries

Shahbaz, Muhammad; Topcu, Betül Altay; Sarıgül, Sevgi Sümerli; Vo, Xuan Vinh

doi:10.1016/j.renene.2021.06.121

Cited by 282 publications

(126 citation statements)

References 54 publications

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“…Financial development positively entices the growth of renewable energy consumption in BRIC nations, especially in the long run, which is align existing literature see, for instance, Shahbaz, et al [120]; Alsaleh and Abdul-Rahim [121], Liu, et al [122], and Burakov and Freidin [30]. Renewable energy has the potential to be a useful instrument in the pursuit of energy diversification through reduced reliance on fossil fuel supplies.…”

Section: Discussionmentioning

confidence: 65%

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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Section: Discussionmentioning

confidence: 65%

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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“…The Sustainable Development Goals ( [30] as important key factors for its successful implementation most specifically in Africa. Goal 7 of SDG addresses the issue of energy security in member nations and is to ensure access to affordable, reliable, sustainable, and modern energy for all.…”

Section: Nigeria Roadmap To Achieving Sdg 2030 (7) and Proposed Way Forwardmentioning

confidence: 99%

“…Goal 7 of SDG addresses the issue of energy security in member nations and is to ensure access to affordable, reliable, sustainable, and modern energy for all. In essence, every country is expected to put up a system of targets and indicators to allow monitoring the steps toward the achievement of the SDGs [31].…”

Section: Nigeria Roadmap To Achieving Sdg 2030 (7) and Proposed Way Forwardmentioning

confidence: 99%

Energy Security and Nigeria’s Sustainable Development: SDG 2030 (7)

Ajao

Adeogun

Ajimotokan

et al. 2021

JENRR

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Over the years, affordable and sustainable energy has been regarded as the backbone of any country needed for the development of her social and economic sectors. Sustainable energy is vital to the production of goods and services, transport, agriculture, health as well as an instrument for politics, security, and diplomacy. Nigeria is regarded as one of the most populous countries in Africa and is blessed with rich and diverse energy resources. However, poor access to affordable and sustainable energy by a larger percentage of the population has become a norm in the past decades and this has constituted greatly to the poor economic and social development of the country. This paper provides a minireview of the different potentials of energy resources in the country, prospects, and challenges of achieving energy security in Nigeria by the year 2030 as detailed in the United Nations sustainable development goal (SDG: 2030). The paper also discussed recent efforts by the government of Nigeria in tackling the energy crisis bedeviling the country. Findings from the review showed that Nigeria is blessed with abundant energy resources. However, the government needs to be proactive in the implementation of some of the proposed actions such as having a clear policy direction on energy and inclusion of renewable energy sources into the energy mix and reduction in energy wastage in its stride towards meeting sustainable development goal (SDG: 7) by the year 2030.

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“…Energy demand is constantly increasing in production and consumption due to increasing population density and industrialization. Most of the world's energy resources are fossil fuels including natural gas, coal and oil ( Khan et al, 2020;Shahbaz et al, 2021). Evidently, increasing fossil fuel consumption proportionately increases CO2 emissions in the atmosphere, which eventually promotes environmental pollution (Khan et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

“…In view of this, low-carbon and green energy production has become a prevalent trend due to these global challenges (Bauer et al 2016;Fang et al 2020). With the public's knowledge on global CO2 emissions, new technical ways to lowering pollution, fossil fuel usage, and improving efficacy in energy demand have become critical (Shahbaz et al 2021). To ensure a green future environment, we must move from traditional fossil fuel energy to renewable energy (Zhang et al 2021) and the greatest fundamental hurdle to overcome in solving this feasible task is the cost of production and other financial restrictions (Shahbaz et al 2021).…”

Section: Introductionmentioning

confidence: 99%

Renewable Energy Demand, Financial Reforms and Environmental Quality in West Africa

Obuobi¹,

Zhang²,

Nketiah³

et al. 2021

Preprint

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Sustainable Development Goal (SDG-7) stipulates the need for clean energy, reduced carbon emissions, prevention of environmental degradation, promotion of biodiversity, and ecosystem preservation. Towards achieving these goals, this study provides new evidence on the causal link between renewable energy demand, financial reforms, economic growth, foreign direct investment, and environmental quality among emerging West African economies. The study adopted the Fully Modified Ordinary Least Squares, Dynamic Ordinary Least Squares, Pooled Mean group estimation and Granger causality test for its analysis. It was found that renewable energy demand has been favorable to the environmental health of West African economies. Also, financial reforms made within the region contributed to increasing the ecological footprints of the region. Direct investments from foreign companies showed encouraging results as it improves the environment quality. We also found a unidirectional causality from ecological footprints to renewable energy demand and financial reforms but a bidirectional relationship with economic growth and foreign direct investment. Moreover, it was evident that ecological footprints granger causes financial reforms and economic growth but not vice versa. Policy recommendations outlined encourages governments and policy-makers to embark on intensive clean energy technologies and effective green financial reforms to help achieve Sustainable Development Goals.

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The effect of financial development on renewable energy demand: The case of developing countries

Cited by 282 publications

References 54 publications

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

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

Energy Security and Nigeria’s Sustainable Development: SDG 2030 (7)

Renewable Energy Demand, Financial Reforms and Environmental Quality in West Africa

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