Energy diversification, financial development and economic development: an examination of convergence in OECD countries

Thanh Nguyen, Son Nghiem and Anh-Tuan Doan

China Finance Review International, 2025, vol. 15, issue 2, 337-362

Abstract: Purpose - This study examines the convergence of energy diversification, financial development and per-capita income in OECD countries. Design/methodology/approach - The research employs the club convergence test to assess convergence among OECD countries and uses Granger causality tests and panel regressions to identify the determinants of convergence, using data from 1997 to 2021. Findings - The convergence tests showed no overall convergence but revealed convergence clubs for each factor. Granger causality tests indicated short-run bi-directional relationships between the variables. Long-run panel regression analysis confirmed that technological progress significantly improves per capita income and energy diversification. Additionally, it revealed bi-directional relationships between energy diversification and financial development, a uni-directional relationship from financial development to per capita income and a U-shaped effect of per capita income on energy diversification, with a turning point at $67,112.8 per year. Practical implications - The findings suggest that within each convergence club, implementing microeconomic incentives for technology development and diffusion in energy, production and financial services could help lagging countries catch up. Originality/value - This study pioneers the testing of convergence in energy diversification, financial development and per capita income in OECD countries and identifies the determinants of this convergence.

Keywords: Convergence; Panel data; Energy diversification; Financial development; Economic development; OECD; O47; Q01; Q42 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:cfripp:cfri-07-2024-0427

DOI: 10.1108/CFRI-07-2024-0427

Access Statistics for this article

China Finance Review International is currently edited by Professor Chongfeng Wu and Professor Haitao Li

More articles in China Finance Review International from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().