The effect of financial development on renewable energy consumption. A panel data approach

By Sorin Gabriel Anton, Anca Elena Afloarei Nucu. Renewable Energy, 2020

589 citations recorded by the source corpus.

Abstract One of the strategic objectives of the European Union is to increase the renewable energy consumption level, in a market which brings together technological, financing and customer engagement innovations. However, little is known about the impact of the financial sector on renewable energy consumption. The aim of the paper is to examine the effect of financial development on renewable energy consumption using a panel data of 28 countries in the European Union (EU) over the period 1990–2015. Our research is based on a panel fixed effects model, where renewable energy consumption is given as a function of income, energy prices, financial development, and foreign direct investments. The results of the empirical analysis show that all three different dimensions of financial development (banking sector, bond market, and capital market) have a positive effect on the share of renewable energy consumption. Additionally, our results show that capital market development does not influence renewable energy consumption in the new EU Member States. Our empirical results give valuable insights into how best to deploy capital in the renewable sector, in order to provide cost-competitive options to customers, with the final objective of expanding higher value-added services.

Subfields: Economics and Econometrics, Pollution

View Paper: https://www.semanticscholar.org/paper/fa8e1e98d913c68e83af48b521f87eb6f1589f4b

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Citations in the corpus

Does financial development influence renewable energy consumption to achieve carbon neutrality in the USA (2021, background): “…model and Granger causality test Russia from 1990 to 2014 Absence of causality running from financial development to renewable energy consumption Anton and Nucu (2020) Panel fixed effects model estimation 28 countries in the European Different dimensions of financial development (banking…”
How does tourism development affect environmental pollution? (2021, methodology): “Fourth, we measure REN as the ratio of REN to total energy consumption (Anton and Nucu, 2020).”
Decomposing Scale and Technique Effects of Financial Development and Foreign Direct Investment on Renewable Energy Consumption (2022, background): “Recently, Anton and Nucu (2020) applied the panel fixed effect technique to investigate the relationship between financial development and renewable energy consumption for a panel of 28 European Union countries.”