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Private Capital Flows, Domestic Financial Markets and Energy Use in Africa

In: The Economics of Banking and Finance in Africa

Author

Listed:
  • Jephthah O. Osei

    (University of Ghana Business School)

  • Joseph Abor

    (Uganda Development Bank Limited)

  • Patricia A. Ojangole

    (University of Ghana Business School)

  • Joshua Yindenaba Abor

    (University of Ghana Business School)

Abstract

This study examines the relationship between private capital flows and energy use in Africa, considering the moderating role of domestic financial markets during the period, 1990–2019. To do this, we use the modified fixed effect model based on the feasible Generalised Least Squares estimator to fit a multiple regression that corrects for serial correlation using the Durbin-Watson serial correction approach. Our empirical results revealed that domestic financial markets play a significant role in establishing the connection between private capital flow and energy use. Specifically, the study showed that private capital inflows conditioned on a favourable financial market environment enhance energy use in Africa. In other words, the presence of these financial market indicators provides a conduit for private capital flows to improve energy use in Africa. Therefore, policy makers in Africa must provide the means to strengthen and further develop the domestic financial markets to attract the necessary private capital capable of enhancing energy use.

Suggested Citation

  • Jephthah O. Osei & Joseph Abor & Patricia A. Ojangole & Joshua Yindenaba Abor, 2022. "Private Capital Flows, Domestic Financial Markets and Energy Use in Africa," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Joshua Yindenaba Abor & Charles Komla Delali Adjasi (ed.), The Economics of Banking and Finance in Africa, chapter 0, pages 965-985, Palgrave Macmillan.
    • Handle: RePEc:pal:pmschp:978-3-031-04162-4_28
    DOI: 10.1007/978-3-031-04162-4_28
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