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Financial Development, Clean Energy, and Human Capital: Roadmap towards Sustainable Growth in América Latina

Pablo Ponce, José Álvarez-García (), Johanna Medina () and María de la Cruz del Río-Rama ()
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José Álvarez-García: Financial Economy and Accounting Department, Faculty of Business, Finance and Tourism, University of Extremadura, 10071 Cáceres, Spain
Johanna Medina: School of Economics, Universidad Nacional de Loja, Loja 11050, Ecuador
María de la Cruz del Río-Rama: Business Management and Marketing Department, Faculty of Business Sciences and Tourism, University of Vigo, 32004 Ourense, Spain

Energies, 2021, vol. 14, issue 13, 1-16

Abstract: The consumption of renewable energy has become a substitute for fossil fuels to mitigate environmental degradation. However, this substitution of energy raises many questions regarding its possible impact on economic growth. In this context, this research aims to examine the long-term relationship between economic growth and financial development, non-renewable energy, renewable energy, and human capital in 16 Latin American countries. Panel data techniques during the period 1988–2018 and statistical information compiled by the World Bank and Penn Word Table databases were used. Second-generation econometric techniques (cross-sectionally augmented Dickey–Fuller (CADF) and cross-sectionally augmented IPS (CIPS) were used in the work methodology, which allow the presence of cross-sectional dependence between sections to be controlled. The main results indicate that there is a long-term equilibrium relationship between financial development, non-renewable energy consumption, renewable energy consumption, human capital, and economic growth. The results show that the consumption of renewable energy does not compromise economic growth; the 1% increase in renewable energy consumption is related to the 1% increase in economic growth. The policy implications suggest some measures to ensure economic growth considering the role of green energy and human capital.

Keywords: sustainable development; economic growth; financial development; panel data; clean energies (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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