Financial markets, innovations and cleaner energy production in OECD countries
Md Al Mamun,
Muhammad Shahbaz () and
Energy Economics, 2018, vol. 72, issue C, 236-254
Using a large sample of 25 Organization for Economic Co-operation and Development (OECD) countries, we provide evidence that the growth of equity and credit markets promotes cleaner energy (biomass renewable energy, non-biomass renewable energy, and total bio and non-bio renewable energy) production in those countries. We also find that the 2008 global financial crisis (GFC) adversely affects the production of cleaner energy. Our results are robust to alternative definitions of financial market development, cleaner energy, and controlling for the effect of government subsidy on cleaner energy. By supporting the demand-induced supply of cleaner energy, we demonstrate that the positive and significant effect of financial market development (FMD) on cleaner energy is stronger in countries with higher growth in carbon intensity and a lower availability of fossil fuels than otherwise. Our results also support the argument that financing uncertain projects such as those that produce cleaner energy should be greater in countries with a higher innovation culture than those where financial markets are already accustomed to undertaking risky investments. The overall results are also robust under the conditions of short-run and long-run homogeneity and the cross-sectional dependence in the sample. Policy implications are also provided.
Keywords: Biomass and cleaner energy production; Common correlated effects pooled (CCEP); Credit and equity markets; Global financial crisis; Innovation (search for similar items in EconPapers)
JEL-codes: F21 P48 Q42 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Financial Markets, Innovations and Cleaner Energy Production in OECD Countries (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:72:y:2018:i:c:p:236-254
Access Statistics for this article
Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant
More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().