Investigating the Impact of Financial Inclusion on Energy Consumption: Does Corruption Matter?

Ming Zhong (), Jingjing Yu () and Syed Anees Haider Zaidi ()
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Ming Zhong: Jiangxi University of Finance and Economics
Jingjing Yu: Jiangxi Environmental Engineering Vocational College

Journal of the Knowledge Economy, 2024, vol. 15, issue 2, No 147, 8797-8814

Abstract: Abstract Financial inclusion (FI) is an integral part of the financial system in any economy. It shapes the energy consumption patterns in the countries, but corruption may disturb these patterns. To explore this phenomenon, this paper aims at examining the impact of financial inclusion on energy consumption by considering the important role of corruption in 22 selected OECD nations. The study covers the period from 2004 to 2019 and uses second-generation tests for unit root and cross-sectional dependence. This study uses Driscoll-Kraay standard errors with random effect and other robustness measures for estimations. The results show that financial inclusion and income increase energy consumption. Here, it is required to encourage renewable energy sources and discourage non-renewable energy sources. Results also reflect that corruption control, globalization, and education decrease energy consumption in OECD countries. This is an indication that OECD consists of advanced countries where education ratio and international trade are of higher volume that cause reduction in energy consumption through modern technology. The empirical findings suggest that financial inclusion needs to be included in the policy-making for growth and energy consumption strategies.

Keywords: Financial inclusion; Energy consumption; Corruption; OECD (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13132-023-01273-1

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