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Renewable and Nonrenewable Energy Consumption, Government Expenditure, Institution Quality, Financial Development, Trade Openness, and Sustainable Development in Latin America and Caribbean Emerging Market and Developing Economies

Author

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  • Hoang Phong Le

    (Department of Finance and Accounting Management, Faculty of Management, Ho Chi Minh City University of Law, 02 Nguyen Tat Thanh Street, District 4, Ho Chi Minh City, Vietnam.)

  • Ho Hoang Gia Bao

    (Department of Finance and Accounting Management, Faculty of Management, Ho Chi Minh City University of Law, 02 Nguyen Tat Thanh Street, District 4, Ho Chi Minh City, Vietnam.)

Abstract

This study investigates the role of non-renewable and renewable energy consumption in the sustainable development in 16 Latin America and Caribbean Emerging Market and Developing Economies (EMDEs) incorporating capital, government expenditure, institution quality, financial development, and trade openness by a multivariate framework using annual data from 1990 to 2014. We apply second-generation techniques for heterogeneous panel data as the presence of cross-sectional dependence and slope heterogeneity is detected. Accordingly, CADF and CIPS unit root tests show that all variables are integrated at order 1. Westerlund cointegration test acknowledges the long-run relationship among the variables. The long-run estimation is conducted by the Augmented Mean Group (AMG), Mean Group (MG) and Common Correlated Effects Mean Group (CCEMG) estimators. The findings indicate that, in the long run, renewable and non-renewable energy use, along with other factors including government expenditure, gross fixed capital formation, trade openness and financial development, positively affects the economic growth in the selected countries. The empirical results imply that the EMDEs in Latin America and the Caribbean should appropriately implement fiscal policies for macroeconomic stabilization in combination with finance and international trade policies as well as effective energy strategies to attain their sustainable development objectives.

Suggested Citation

  • Hoang Phong Le & Ho Hoang Gia Bao, 2020. "Renewable and Nonrenewable Energy Consumption, Government Expenditure, Institution Quality, Financial Development, Trade Openness, and Sustainable Development in Latin America and Caribbean Emerging M," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 242-248.
    • Handle: RePEc:eco:journ2:2020-01-35
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    21. Liu, Qiang & Zhao, Zhongwei & Liu, Yiran & He, Yao, 2022. "Natural resources commodity prices volatility, economic performance and environment: Evaluating the role of oil rents," Resources Policy, Elsevier, vol. 76(C).

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    More about this item

    Keywords

    Sustainable Development; Renewable and non-renewable energy use; Heterogeneous Panel Data; Economic growth; Emerging Market and Developing Economies; Latin America and the Caribbean.;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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