IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/v15y2025i3id18133.html

The Role of Financial Market Development in Renewable Energy Generation: Evidence from European Countries

Author

Listed:
  • Bonga-Bonga, Lumengo

    (University of Johannesburg, Johannesburg, South Africa)

  • Kirsten, Frederich

    (University of Johannesburg, Johannesburg, South Africa)

Abstract

This paper investigates the relationship between renewable energy generation and financial market development in European countries. It enhances the existing literature by analysing this relationship through three dimensions of financial market development-access, efficiency, and depth-and by categorizing renewable energy generation into three types: Wind, solar, and hydroelectric. The study also examines the mediating role of stock market capitalization in this nexus. Employing panel two-stage least squares (2SLS) based on Lewbel's instrumental variable approach, the findings reveal that wind energy generation is the most responsive to the different components of financial market development in European countries. Furthermore, using bootstrapping causal mediation analysis, the results confirm a significant mediating effect of stock market capitalization, particularly in the influence of financial market development on wind energy generation. These findings provide actionable insights for policymakers aiming to finance renewable energy initiatives to advance Sustainable Development Goal 13.

Suggested Citation

  • Bonga-Bonga, Lumengo & Kirsten, Frederich, 2025. "The Role of Financial Market Development in Renewable Energy Generation: Evidence from European Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 15(3), pages 709-718, April.
    • Handle: RePEc:eco:journ2:v:15:y:2025:i:3:id:18133
    DOI: 10.32479/ijeep.18133
    as

    Download full text from publisher

    File URL: https://econjournals.com/index.php/ijeep/article/download/18133/8895
    Download Restriction: no
    File URL: https://libkey.io/10.32479/ijeep.18133?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
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:eco:journ2:v:15:y:2025:i:3:id:18133. 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: Monica Sinhat (email available below). General contact details of provider: https://econjournals.com/index.php/ijeep .

    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.