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Role Of Financial Development For Solving The Energy Insecurity In Asia

Author

Listed:
  • PICHAYAKONE RAKPHO

    (Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • WORAPHON YAMAKA

    (Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • WACHIRAWIT PUTTACHAI

    (Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • PARAVEE MANEEJUK

    (Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

Abstract

This study aims to investigate the nonlinear effect of financial development on energy security in Asia-16 countries over the period 2000–2016 using the proposed Panel Smooth Transition model for heterogeneity in time trends. Our model shows a single-threshold effect on financial development and energy security relationship, whereas energy accessibility, renewable energy share, and energy intensity are used as indicators of energy security. It implies that the sample can be split into two regimes: low- and high-FDI regime, we choose FDI as the threshold variable because it is a source of innovation that could reduce the demand for energy. The findings indicate that financial development goes hand-in-hand with energy accessibility and renewable energy share, and it also reduces the energy inefficiency in the economy. We also find that the contribution of financial development on renewable energy share becomes more substantial when the FDI is greater than the threshold point (0.9343% of GDP). However, the value of crude oil imports shows a negative impact on energy security in our empirical model.

Suggested Citation

  • Pichayakone Rakpho & Woraphon Yamaka & Wachirawit Puttachai & Paravee Maneejuk, 2021. "Role Of Financial Development For Solving The Energy Insecurity In Asia," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 66(02), pages 413-434, March.
    • Handle: RePEc:wsi:serxxx:v:66:y:2021:i:02:n:s0217590820430018
    DOI: 10.1142/S0217590820430018
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    Cited by:

    1. Lee, Chien-Chiang & Wang, Chang-song, 2022. "Financial development, technological innovation and energy security: Evidence from Chinese provincial experience," Energy Economics, Elsevier, vol. 112(C).
    2. M. Tamilselvan & Srinivasan Palamalai & S. Manikandan & Manjula Veerabhadrappa & Vinod Repalli, 2022. "Does Financial Development Lower Energy Intensity in India?," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 111-116, September.

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