Financial globalization and energy transition: Insights from 149 countries

The energy transition is continuously accelerating worldwide. Financial globalization, related to financing source, investment risk and technology transfer, affects energy transition. This study examines the impact of financial globalization on energy transitions by considering financial globalization using overall, de facto, and de jure measures. A comprehensive energy transition index is constructed based on 3E (energy, environment, and economy) theory. Data from between 2000 and 2019 are collected from 149 countries. A quantile regression panel data model is used and compared with a fixed effects model. The results show that financial globalization has a negative effect on energy transition in medium-energy transition countries but has a positive effect in low- and high-energy transition countries. The impact of financial globalization on energy transition in Europe is higher than that on other continents. The role of financial globalization in Belt and Road countries is more obvious; the Paris Agreement has optimized the role of financial globalization. Financial globalization plays a positive role in countries with low renewable energy consumption and in regions with low degrees of capital formation. Relevant governments should promote financial globalization, optimize the allocation of financial resource, formulate differentiated transition policies and strengthen financial risk management to promote energy transition.