Sustainable Energy Demand in Bangladesh: The Influence of Financial and Political Factors through Marshallian Demand Function

Tasnova Jerin Ulfat (), Shewly Bala (), H. Prathibha (), Ann Mary Cherian (), Hemel Hossain (), Mohammad Ridwan (), Abdul Rahim Ridzuan () and K.P. Jaheer Mukthar ()
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Tasnova Jerin Ulfat: Faculty of Arts and Social Sciences, American International University-Bangladesh, Dhaka, Bangladesh
Shewly Bala: Department of Finance, University of Dhaka, Dhaka, Bangladesh
H. Prathibha: Department of Economics, Government Arts College Thycadu, Kerala, India
Ann Mary Cherian: Department of Economics, Christ College (Autonomous), Irinjalakuda, Kerala, India
Hemel Hossain: Masters in Bank Management, Dhaka University, Dhaka, Bangladesh
Mohammad Ridwan: Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali, Bangladesh
Abdul Rahim Ridzuan: Institute for Big Data Analytics and Artificial Intelligence (IBDAAI), Universiti Teknologi MARA, Shah Alam, Selangor, Malaysia; & Centre for Economic Development and Policy (CEDP), Universiti Malaysia Sabah, Kota Kinabalu, Sabah, Malaysia; & Faculty of Business and Management, Universiti Teknologi MARA, Puncak Alam Campus, Selangor, Malaysia
K.P. Jaheer Mukthar: Department of Economics, Kristu Jayanti College Autonomous, Bengaluru, India; & INTI International University, Nilai, Malaysia

International Journal of Energy Economics and Policy, 2025, vol. 15, issue 5, 146-157

Abstract: The study aims to consider the impact of economy, trade openness (TRD), political stability (POS), financial development (FD), and urbanization (URB) on the energy demand (ENU) of Bangladesh. Several techniques, including the ARDL bound test for cointegration, DOLS, FMOLS, and CCR, were used to check how changes in independent factors impacted the dependent parameter. The ARDL findings indicate a considerable encouraging correlation among GDP expansion, political stability, trade openness, urbanization, and ENU. A 1% rise in GDP, POS, TRD, and URB causes a long-term rise in energy utilization of 0.327%, 0.817%, 1.166%, and 1.775%, respectively. In contrast, the increase in FD has a substantial favorable correlation with ENU, with energy use anticipated to decrease by 0.192% in the long term for every 1% upsurge in FD. The reliability of the findings is further validated by multiple estimators, including FMOLS, DOLS, and CCR. The Pairwise Granger Causality assessment was adopted to show the causal connection among many components. The analysis advocates for the establishment of regulatory initiatives to encourage energy efficiency, enhance the use of green power, and invest in sustainable trade and urban planning to reduce energy use and attain sustainable cities and environments in Bangladesh.

Keywords: Trade Openness; Political Stability; Financial Development; Energy Demand; Bangladesh (search for similar items in EconPapers)
Date: 2025
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DOI: 10.32479/ijeep.18959

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