Renewable energy consumption, financial development and economic growth: Evidence from panel data for the Middle East and North African countries

Nagmi Aimer ()
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Nagmi Aimer: Higher Institute of Marine Sciences Techniques- Sabratha, Libya

Economics Bulletin, 2020, vol. 40, issue 3, 2058-2072

Abstract: This paper aims to explore the relationship between economic growth and financial development of the MENA countries over the period 1990 to 2015. The results of the fixed and random effect tests showed that there is a negative relationship between renewable energy consumption and economic growth, but their impact on oil-importing countries is greater than that of oil-exporting countries. While the impact of domestic credit to the private sector has a positive affect economic growth, it appears that its impact on oil-importing countries is greater than that on oil exporting. In addition, the unidirectional causality stems from growth to domestic credit in long run, the bidirectional causality between economic growth and renewable energy consumption in the MENA. In the case of oil-importing countries, there is no causal relationship between the variables, whereas for the oil-exporting countries there is a unidirectional causality that extends from real GDP to domestic credit, as well as from renewable energy consumption to real GDP. In addition, there is unidirectional causality that stems from the domestic credit to energy consumption. These results indicate that the MENA countries are an economy independent of energy and that economic growth is crucial in providing the resources necessary for sustainable development.

Keywords: Renewable energy consumption; financial development; economic growth; MENA; panel data. (search for similar items in EconPapers)
JEL-codes: A1 J1 (search for similar items in EconPapers)
Date: 2020-08-08
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Citations: View citations in EconPapers (2)

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