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The Historical Roots of Energy Consumption: Does Financial Development Matter?

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  • Therese E. Zogo
  • Seabrook Arthur Mveng
  • Simplice A. Asongu

Abstract

The objective of this study is to investigate how statehood experience affects energy consumption through the advancement of finance and its sub‐sectors. By doing so, the study uses the ordinary and two‐stage least squares methods to analyze data from 111 countries spanning from 2000 to 2018. Following the econometric estimations, the results show that accumulated statehood experience has an inverse impact on energy consumption through its influence on financial development. Furthermore, by splitting financial development into its main sub‐indices, the strongest indirect effects occur through financial institutions' development. However, the nature of this indirect impact relies on the development level of financial institutions. Indeed, the indirect effect is positive when the advancement rate of financial institutions is less than 0.39. On the other hand, it becomes negative when the advancement rate of financial institutions is above 0.6. Policy implications are discussed. 本研究旨在探究建国经验如何通过金融及其子行业的发展影响能源消耗。为此, 本研究采用普通最小二乘法和两阶段最小二乘法, 分析了111个国家2000年至2018年的数据。根据计量经济学估计, 研究结果表明, 建国经验的积累通过影响金融发展对能源消耗产生负向影响。此外, 将金融发展分解为主要子指标后, 金融机构发展对能源消耗的间接影响最为显著。然而, 这种间接影响的性质取决于金融机构的发展水平。事实上, 当金融机构的发展率低于0.39时, 间接影响为正；而当金融机构的发展率高于0.6时, 间接影响则为负。本文还探讨了政策含义。 El objetivo de este estudio es investigar cómo la experiencia de Estado afecta al consumo energético a través del avance de las finanzas y sus subsectores. Para ello, el estudio utiliza los métodos de mínimos cuadrados ordinarios y de dos etapas para analizar datos de 111 países del período 2000‐2018. Tras las estimaciones econométricas, los resultados de nuestro estudio muestran que la experiencia acumulada de Estado tiene un impacto inverso en el consumo energético a través de su influencia en el desarrollo financiero. Además, al dividir el desarrollo financiero en sus principales subíndices, los efectos indirectos más significativos se producen a través del desarrollo de las instituciones financieras. Sin embargo, la naturaleza de este impacto indirecto depende del nivel de desarrollo de estas. De hecho, el efecto indirecto es positivo cuando la tasa de avance de las instituciones financieras es inferior a 0,39. Por otro lado, se vuelve negativo cuando la tasa de avance de las instituciones financieras es superior a 0,6. Se discuten las implicaciones políticas.

Suggested Citation

  • Therese E. Zogo & Seabrook Arthur Mveng & Simplice A. Asongu, 2025. "The Historical Roots of Energy Consumption: Does Financial Development Matter?," World Affairs, John Wiley & Sons, vol. 188(3), July.
    • Handle: RePEc:wly:woraff:v:188:y:2025:i:3:n:waf270026
    DOI: 10.1002/waf2.70026
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