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The impact of financial development on energy consumption in emerging economies

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  • Sadorsky, Perry
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    Abstract

    Financial development is often cited as a very important driver of economic growth in emerging economies and it is thus likely that financial development affects energy demand. This study uses generalized method of moments estimation techniques to examine the impact of financial development on energy consumption in a sample of emerging countries. Several different measures of financial development are examined. Using a panel data set on 22 emerging countries covering the period 1990-2006, the empirical results show a positive and statistically significant relationship between financial development and energy consumption when financial development is measured using stock market variables like stock market capitalization to GDP, stock market value traded to GDP, and stock market turnover. The implications of these results for energy policy are discussed.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 38 (2010)
    Issue (Month): 5 (May)
    Pages: 2528-2535

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    Handle: RePEc:eee:enepol:v:38:y:2010:i:5:p:2528-2535

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Energy consumption Financial development Emerging economies;

    References

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    Cited by:
    1. Muhammad, Shahbaz & Saleheen, Khan & Mohammad, Iqbal Tahir, 2012. "The Dynamic Link between Energy Consumption, Economic Growth, Financial Development and Trade in China: Fresh Evidence from Multivariate Framework Analysis," MPRA Paper 42974, University Library of Munich, Germany, revised 26 Nov 2012.
    2. Muhammad, Shahbaz, 2011. "Electricity Consumption, Financial Development and Economic Growth Nexus: A Revisit Study of Their Causality in Pakistan," MPRA Paper 35588, University Library of Munich, Germany, revised 27 Dec 2011.
    3. Islam, Faridul & Shahbaz, Muhammad & Ahmed, Ashraf U. & Alam, Md. Mahmudul, 2013. "Financial development and energy consumption nexus in Malaysia: A multivariate time series analysis," Economic Modelling, Elsevier, vol. 30(C), pages 435-441.
    4. Shahbaz, Muhammad, 2010. "Does financial instability increase environmental pollution in Pakistan?," MPRA Paper 31360, University Library of Munich, Germany, revised 28 Mar 2011.
    5. Muhammad, Shahbaz & Mihai, Mutascu & Parvez, Azim, 2011. "Environmental Kuznets Curve in Romania and the Role of Energy Consumption," MPRA Paper 32254, University Library of Munich, Germany, revised 15 Jul 2011.
    6. Tang, Chor Foon & Shahbaz, Muhammad, 2011. "Revisiting the Electricity Consumption-Growth Nexus for Portugal: Evidence from a Multivariate Framework Analysis," MPRA Paper 28393, University Library of Munich, Germany.
    7. Muhammad, Shahbaz & Lean, Hooi Hooi, 2011. "Does Financial Development Increase Energy Consumption? Role of Industrialization and Urbanization in Tunisia," MPRA Paper 33194, University Library of Munich, Germany, revised 06 Sep 2011.
    8. Zhang, Yue-Jun, 2011. "The impact of financial development on carbon emissions: An empirical analysis in China," Energy Policy, Elsevier, vol. 39(4), pages 2197-2203, April.
    9. Sadorsky, Perry, 2011. "Financial development and energy consumption in Central and Eastern European frontier economies," Energy Policy, Elsevier, vol. 39(2), pages 999-1006, February.

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