The Influence of Financial Development on Energy Consumption: Worldwide Evidence

Xiaoxin Ma and Qiang Fu
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Xiaoxin Ma: Economics and Management School, Wuhan University, Wuhan 430072, China
Qiang Fu: Postdoctoral Workstation of China Construction Bank, Beijing 100032, China

IJERPH, 2020, vol. 17, issue 4, 1-15

Abstract: In this study, we investigated the influence of overall financial development and its components on energy consumption using the panel data of 120 countries and the generalized method of moments (GMM). By dividing the sample into developed and developing countries, we further examined the national differences of the impact of financial development on energy consumption. The empirical results indicate that the overall financial development significantly positively impacts energy consumption from a worldwide perspective, and its two components (financial institution and the financial market) have the same effect. The analysis of national differences indicates that the financial development also positively impacts energy consumption in developing countries but with no obvious effect in developed countries. The results also suggest that financial development cannot be used to restrain the increase in energy consumption from the global perspective, and policymakers in developing countries must balance the relationship between the development of the financial sector and energy consumption.

Keywords: financial development; energy consumption; worldwide evidence; system GMM (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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