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How does the development of the financial industry advance renewable energy? A panel regression study of 198 countries over three decades

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  • Scholtens, Bert
  • Veldhuis, Rineke

Abstract

We investigate how the development of the financial industry connects with renewable energy. We analyze 198 countries over three decades in various model settings (fixed effects, random effects, dynamic panel). We use a wide range of proxies for the development of the financial industry and establish that in general this development has a positive impact on renewable energy capacity. Especially, the relative size of the commercial banking industry as well as of private credit and the size of the financial industry play a crucial role in advancing renewable energy investments.

Suggested Citation

  • Scholtens, Bert & Veldhuis, Rineke, 2015. "How does the development of the financial industry advance renewable energy? A panel regression study of 198 countries over three decades," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113114, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc15:113114
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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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