The relationship of renewable energy consumption to financial development and economic growth in China

Juan Wang, Sulan Zhang and Qingjun Zhang

Renewable Energy, 2021, vol. 170, issue C, 897-904

Abstract: Renewable energy has been considered as an effective way to solve environmental pollution and energy crisis in China. However, the development of renewable energy sector depends on economic growth and financial issues. Thus, it is significant to study the relationships of these three indicators in China. Using ARDL-PMG model, this paper explores the long-run and short-run impacts of economic growth and financial development on renewable energy consumption based on the panel data during period 1997–2017 at national and regional levels of China. The long-run relationships indicate that for China as a whole and western China, economic growth stimulates renewable energy consumption while financial development impacts it negatively. However, the short-run relationships show that economic growth and financial development influence renewable energy consumption negatively and positively, respectively. Moreover, we employ the Granger causality test to study the existence and direction of causality among variables. The causality test results display that the unidirectional causality relationships exist from financial development to renewable energy consumption for China as a whole and eastern China. Meanwhile, economic growth unidirectionally causes renewable energy consumption in China as a whole, eastern and western China. Our empirical results provide some policies to promote the development of renewable energy sector.

Keywords: Renewable energy; Financial development; Economic growth; Panel data model (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (63)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960148121002068
Full text for ScienceDirect subscribers only

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:eee:renene:v:170:y:2021:i:c:p:897-904

DOI: 10.1016/j.renene.2021.02.038

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

More articles in Renewable Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().