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Financial development and energy consumption in Central and Eastern European frontier economies

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  • Sadorsky, Perry
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    Abstract

    This study examines the impact of financial development on energy consumption in a sample of 9 Central and Eastern European frontier economies. Several different measures of financial development are examined including bank related variables and stock market variables. The empirical results, obtained from dynamic panel demand models, show a positive and statistically significant relationship between financial development and energy consumption when financial development is measured using banking variables like deposit money bank assets to GDP, financial system deposits to GDP, or liquid liabilities to GDP. Of the three stock market variables investigated, only one, stock market turnover, has a positive and statistically significant impact on energy consumption. Both short-run and long-run elasticities are presented. 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): 39 (2011)
    Issue (Month): 2 (February)
    Pages: 999-1006

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    Handle: RePEc:eee:enepol:v:39:y:2011:i:2:p:999-1006

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

    Related research

    Keywords: Energy consumption Financial development Frontier economies;

    References

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    Citations

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    Cited by:
    1. Shahbaz, Muhammad, 2011. "Does financial instability increase environmental pollution in Pakistan?," MPRA Paper 31530, University Library of Munich, Germany, revised 27 Mar 2011.
    2. Solarin, Sakiru Adebola & Shahbaz, Muhammad, 2013. "Trivariate Causality between Economic Growth, Urbanisation and Electricity Consumption in Angola: Cointegration and Causality Analysis," MPRA Paper 45580, University Library of Munich, Germany, revised 19 Mar 2013.
    3. Muhammad, Shahbaz & Qazi Muhammad Adnan, Hye & Aviral Kumar, Tiwari, 2013. "Economic Growth, Energy Consumption, Financial Development, International Trade and CO2 Emissions, in Indonesia," MPRA Paper 43272, University Library of Munich, Germany, revised 10 Dec 2012.
    4. Chor Tang & Bee Tan, 2014. "The linkages among energy consumption, economic growth, relative price, foreign direct investment, and financial development in Malaysia," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(2), pages 781-797, March.
    5. 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.
    6. Huimin, Liu, 2013. "The impact of human behavior on ecological threshold: Positive or negative?—Grey relational analysis of ecological footprint, energy consumption and environmental protection," Energy Policy, Elsevier, vol. 56(C), pages 711-719.
    7. Shahbaz, Muhammad & Khan, Saleheen & Tahir, Mohammad Iqbal, 2013. "The dynamic links between energy consumption, economic growth, financial development and trade in China: Fresh evidence from multivariate framework analysis," Energy Economics, Elsevier, vol. 40(C), pages 8-21.
    8. Çoban, Serap & Topcu, Mert, 2013. "The nexus between financial development and energy consumption in the EU: A dynamic panel data analysis," Energy Economics, Elsevier, vol. 39(C), pages 81-88.
    9. Sbia, Rashid & Shahbaz, Muhammad, 2013. "The Weight of Economic Growth and Urbanization on Electricity Demand in UAE," MPRA Paper 47981, University Library of Munich, Germany, revised 03 Jul 2013.
    10. Muhammad, Shahbaz, 2012. "Multivariate granger causality between CO2 Emissions, energy intensity, financial development and economic growth: evidence from Portugal," MPRA Paper 37774, University Library of Munich, Germany, revised 31 Mar 2012.
    11. Shahbaz, Muhammad & Abosedra, Salah & Sbia, Rashid, 2013. "Energy Consumption, Financial Development and Growth: Evidence from Cointegration with unknown Structural breaks in Lebanon," MPRA Paper 46580, University Library of Munich, Germany.
    12. Paresh Narayan & Russell Smyth, 2014. "Applied Econometrics and a Decade of Energy Economics Research," Development Research Unit Working Paper Series 21-14, Monash University, Department of Economics.
    13. Shahbaz, Muhammad, 2013. "Does financial instability increase environmental degradation? Fresh evidence from Pakistan," Economic Modelling, Elsevier, vol. 33(C), pages 537-544.
    14. Ersan Ersoy & Ulaþ Ünlü, 2013. "Energy Consumption and Stock Market Relationship: Evidence from Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 3(Special), pages 34 - 40.
    15. Al-mulali, Usama & Binti Che Sab, Che Normee, 2012. "The impact of energy consumption and CO2 emission on the economic and financial development in 19 selected countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4365-4369.
    16. Omri, Anis, 2013. "CO2 emissions, energy consumption and economic growth nexus in MENA countries: Evidence from simultaneous equations models," Energy Economics, Elsevier, vol. 40(C), pages 657-664.

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