IDEAS home Printed from https://ideas.repec.org/a/wsi/jicepx/v14y2023i01ns1793993323500035.html
   My bibliography  Save this article

Financial Sector Development and Energy Consumption in Sub-Saharan Africa: Does Institutional Governance Matter? Dynamic Panel Data Analysis

Author

Listed:
  • Paul Ndubuisi

    (Department of Banking and Finance, Abia State University Uturu, Abia State, Nigeria)

  • Kingsley Ikechukwu Okere

    (��Department of Economics, Banking and Finance, Gregory University Uturu, Abia State, Nigeria3Entrepreneurship Center, Gregory University Uturu, Abia, Nigeria)

  • Eugene Iheanacho

    (��Department of Economics, Abia State University Ututu, Abia State, Nigeria)

Abstract

The failure of energy economists and planners to comprehend the dynamics and paradigm shift in the finance and institutional quality domain that drive energy use is blamed for the ongoing energy consumption concerns. Consequently, this study revisits and contributes to repositories by examining the relationship between finance-renewable energy consumption and institution-renewable energy consumption. The research question raised is: Do governance indicators moderate the impact of finance on renewable energy consumption? With panel dataset of 46 countries in sub-Saharan Africa spanning from 2010 to 2020 and using political stability, voice and accountability, government effectiveness, and regulatory quality indicators of governance, the research output is as follows: (i) Financial development exerts a significant positive impact on renewable energy consumption and intensity, but the level of impact is weak (i.e., at a 10% level significant). (ii) The governance indicators significantly drag renewable energy consumption and intensity. (iii) The negative interaction between financial development and governance indicators is sufficient to worsen the weak relationship between finance and renewable energy in sub-Saharan Africa. (iv) Governance threshold eroded the weak positive effect of financial development on renewable energy consumption and intensity, leading to negative synergy effect in some cases, and (v) The net effect from the moderating impact of governance indicators on finance is significantly different across model specification. The study demonstrates the undeveloped nature of finance and institutional framework in sub-Saharan Africa, considering the weak association between the key variables.

Suggested Citation

  • Paul Ndubuisi & Kingsley Ikechukwu Okere & Eugene Iheanacho, 2023. "Financial Sector Development and Energy Consumption in Sub-Saharan Africa: Does Institutional Governance Matter? Dynamic Panel Data Analysis," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 1-34, February.
  • Handle: RePEc:wsi:jicepx:v:14:y:2023:i:01:n:s1793993323500035
    DOI: 10.1142/S1793993323500035
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S1793993323500035
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1142/S1793993323500035?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Finance; governance; renewable energy; energy intensity; Sub-Saharan Africa; GMM;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:jicepx:v:14:y:2023:i:01:n:s1793993323500035. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/jicep/jicep.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.