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The Impact Of Renewable And Non-Renewable Energy Consumption On Financial Development: Evidence From Emerging Countries

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  • Feyyaz Zeren
  • Süleyman Serdar Karaca

Abstract

Energy is an essential factor for countries to accomplish sustainable development and the importance of renewable energy has enhancing day by day. Over the last three decades the relationship between renewable energy consumption (RNW) and economic growth as well as energy consumption (EC) and financial development (FD) has intensely studied. In this paper the relationship between RNW, non-renewable energy consumption (non-RNW) and FD is investigated for top emerging countries of Bloomberg. The financial system deposits to GDP, deposit money bank assets to GDP and private credit to GDP have considered as FD indicators in the paper that investigates the period of 1980-2018. The long-term relationship between the variables was studied with Westerlund (2007) panel cointegration test and the direction of this relationship was examined with Pesaran (2006) CCE-MG panel cointegration estimator. The existence of causality among the variables was analyzed with Dumitrescu and Hurlin (2012) panel causality test. According to the cointegration test results, a positive long-run relationship was found between RNW and FD. Also, there is a bidirectional causality finding between RNW and FD, and there is a one-way causality finding from FD to non-RNW.

Suggested Citation

  • Feyyaz Zeren & Süleyman Serdar Karaca, 2021. "The Impact Of Renewable And Non-Renewable Energy Consumption On Financial Development: Evidence From Emerging Countries," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 6(1), pages 1-15.
    • Handle: RePEc:ahs:journl:v:6:y:2021:i:1:p:1-15
    DOI: 10.30784/epfad.727864
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    References listed on IDEAS

    as
    1. Joakim Westerlund, 2007. "Testing for Error Correction in Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 709-748, December.
    2. Feyyaz ZEREN & Mustafa KOC, 2014. "The Nexus between Energy Consumption and Financial Development with Asymmetric Causality Test: New Evidence from Newly Industrialized Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 4(1), pages 83-91.
    3. Emirmahmutoglu, Furkan & Kose, Nezir, 2011. "Testing for Granger causality in heterogeneous mixed panels," Economic Modelling, Elsevier, vol. 28(3), pages 870-876, May.
    4. 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.
    5. Destek, Mehmet Akif, 2017. "Financial development and energy consumption nexus in emerging economies," MPRA Paper 106956, University Library of Munich, Germany.
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    More about this item

    Keywords

    Financial Development; Renewable Energy Consumption; Non-Renewable Energy Consumption; Panel Cointegration Test; Panel Causality Test;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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