Financial markets, innovations and cleaner energy production in OECD countries
By A. Mamun, K. Sohag, Muhammad Shahbaz, Shawkat Hammoudeh. Energy Economics, 2018
162 citations recorded by the source corpus.
Using a large sample of 25 Organization for Economic Co-operation and Development (OECD) countries, we provide evidence that the growth of equity and credit markets promotes cleaner energy (biomass renewable energy, non biomass renewable energy, and total bio and non-bio renewable energy) production in those countries. We also find that the 2008 global financial crisis (GFC) adversely affects the production of cleaner energy. Our results are robust to alternative definitions of financial market development, cleaner energy, and controlling for the effect of government subsidy on cleaner energy. By supporting the demand-induced supply of cleaner energy, we demonstrate that the positive and significant effect of financial market development (FMD) on cleaner energy is stronger in countries with higher growth in carbon intensity and a lower availability of fossil fuels than otherwise. Our results also support the argument that financing uncertain projects such as those that produce cleaner energy should be greater in countries with a higher innovation culture than those where financial markets are already accustomed to undertaking risky investments. The overall results are also robust under the conditions of short-run and long-run homogeneity and the cross-sectional dependence in the sample. Policy implications are also provided.
View Paper: https://www.semanticscholar.org/paper/f4ea918801b28f9ea277eaf551d87e8984ff8b67
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Citations in the corpus
- Environmental Policy and Innovation: A Decade of Research (2019, background): “Al Mamum et al. (2017) uses panel data from 25 OECD countries to show that growth of equity and credit markets promotes clean energy production. The effect is larger in countries with higher rates of innovation. Brunnschweiler (2010) shows that underdeveloped financial sectors hinder deployment of r”