Impact of bank performance on energy consumption: evidence from selected commonwealth member states

This paper aims to determine the effect of bank performance, urbanisation, industrialisation and expansion of the economy on the use of energy by using 'Fully Modified Ordinary Least Square (FMOLS), Dynamic Ordinary Least Square (DOLS) and the Dumitrescu-Hurlin (DH) causality tests', with a panel of 26 nations for the period of 1996-2017. The outcomes revealed that industrialisation, expansion of the economy and bank performance have a positive correlation with the consumption of energy, which infers that an increase in these variables will rise the demand for per capita use of energy. The outcomes indicate that an upsurge in urbanisation will result in a decrease in energy use. Furthermore, we found that industrialisation, urbanisation, expansion of the economy and bank performance have a two-way causal association with the consumption of energy. This finding can serve as a guide to policy makers with regard to the use of more sophisticated technology in reducing the effects of bank performance (ROA), industrialisation and other economic activities on energy use; hence, high-energy consumption can lead to increased CO2 emission, which, if not properly managed, can result in environmental degradation and pollution. Thus, urbanisation should be encouraged because increased urban concentration declines energy use, which results in a decrease in the risk of pollution.