IDEAS home Printed from https://ideas.repec.org/a/aen/journl/ej39-si1-aller.html
   My bibliography  Save this article

The Effect of Financial Development on Energy Intensity in China

Author

Listed:
  • Carlos Aller, Maria Jesus Herrerias, and Javier Ordóñez

Abstract

In this study, we analyse the relationship between financial development and energy intensity in 28 Chinese provinces over the period 1999 to 2014. Using a wide variety of financial development measures, as well as specific indicators capturing the level of state intervention in the financial system and the degree of market-driven financing in the economy, we examine whether limited access to finance acts as a barrier to reducing energy intensity. Our estimations control for variables such as state investment, stock market capitalization and the composition effect. Further, a GMM estimator is used to control for endogeneity in our models. Our results provide evidence that a poorly functioning financial system constrains the reduction of energy intensity across regions. However, the strength of these effects has been gradually declining over time, especially following the implementation of the Green Credit Policy. Limitations in domestic access to finance as well as the misallocation of funds and the efficient use of capital have policy implications, as they can reduce the incentives for investment in the energy sector. These findings are a source of considerable interest in light of the new policy based on green credit, and they highlight new opportunities as well as challenges to sustainable economic growth.

Suggested Citation

  • Carlos Aller, Maria Jesus Herrerias, and Javier Ordóñez, 2018. "The Effect of Financial Development on Energy Intensity in China," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    • Handle: RePEc:aen:journl:ej39-si1-aller
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=3202
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.
    ---><---

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

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Dengjun & Xie, Yifan, 2022. "Customer environmental concerns and profit margin: Evidence from manufacturing firms," Journal of Economics and Business, Elsevier, vol. 120(C).
    2. Xiaowei Ding & Ruxu Jing & Kaikun Wu & Maria V. Petrovskaya & Zhikun Li & Alina Steblyanskaya & Lyu Ye & Xiaotong Wang & Vasiliy M. Makarov, 2022. "The Impact Mechanism of Green Credit Policy on the Sustainability Performance of Heavily Polluting Enterprises—Based on the Perspectives of Technological Innovation Level and Credit Resource Allocatio," IJERPH, MDPI, vol. 19(21), pages 1-26, November.
    3. Mohd Haizam Mohd Saudi & Obsatar Sinaga & Djoko Roespinoedji & Erlane K. Ghani, 2019. "The Impact of Technological Innovation on Energy Intensity: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 11-17.
    4. Festus Fatai Adedoyin & Festus Victor Bekun & Kayode Kolawole Eluwole & Samuel Adams, 2022. "Modelling the Nexus between Financial Development, FDI, and CO 2 Emission: Does Institutional Quality Matter?," Energies, MDPI, vol. 15(20), pages 1-17, October.
    5. Xiaoxiao Chu & Hong Geng & Wen Guo, 2019. "How Does Energy Misallocation Affect Carbon Emission Efficiency in China? An Empirical Study Based on the Spatial Econometric Model," Sustainability, MDPI, vol. 11(7), pages 1-16, April.
    6. Cao, Jianhong & Law, Siong Hook & Samad, Abdul Rahim Abdul & Mohamad, Wan Norhidayah W., 2023. "Internal mechanism analysis of the financial vanishing effect on green growth: Evidence from China," Energy Economics, Elsevier, vol. 120(C).
    7. Goshu Desalegn & Maria Fekete-Farkas & Anita Tangl, 2022. "The Effect of Monetary Policy and Private Investment on Green Finance: Evidence from Hungary," JRFM, MDPI, vol. 15(3), pages 1-18, March.
    8. Adom, Philip Kofi & Amuakwa-Mensah, Franklin & Akorli, Charity Dzifa, 2023. "Energy efficiency as a sustainability concern in Africa and financial development: How much bias is involved?," Energy Economics, Elsevier, vol. 120(C).
    9. Mohd Irfan & Bamadev Mahapatra & Raj Kumar Ojha, 2023. "Energy Efficiency and Carbon Emissions in Developed and Developing Economies: Investigating the Moderating Role of Financial Development," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 21(2), pages 437-455, June.
    10. Halkos, George & Moll de Alba, Jaime & Todorov, Valentin, 2021. "Analyzing manufacturing sector and selected development challenges: A panel data analysis," Energy, Elsevier, vol. 235(C).

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    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:aen:journl:ej39-si1-aller. 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: David Williams (email available below). General contact details of provider: https://edirc.repec.org/data/iaeeeea.html .

    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.