The Dynamic Impacts of Economic Growth, Financial Globalization, Fossil Fuel, Renewable Energy, and Urbanization on Load Capacity Factor in Mexico

Asif Raihan, Mamunur Rashid, Liton Chandra Voumik, Salma Akter and Miguel Angel Esquivias ()
Additional contact information
Asif Raihan: Institute of Climate Change, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia
Mamunur Rashid: Department of Information Technology, School of Business & Technology, Emporia State University, Emporia, KS 66801, USA
Liton Chandra Voumik: Department of Economics, Noakhali Science and Technology University, Noakhali 3814, Bangladesh
Salma Akter: Department of Economics, Noakhali Science and Technology University, Noakhali 3814, Bangladesh
Miguel Angel Esquivias: Department of Economics, Airlangga University, Surabaya 60286, Indonesia

Sustainability, 2023, vol. 15, issue 18, 1-21

Abstract: This study explores the interplay among economic growth, financial globalization, urbanization, fossil fuel consumption, and renewable energy usage and their combined impact on the load capacity factor in Mexico. This research employs the load capacity factor as a unique measure of ecological health, facilitating a comprehensive ecosystem assessment by sequentially evaluating biocapacity and ecological effects. Using time series data spanning from 1971 to 2018, this study employs the Autoregressive Distributed Lag (ARDL) method to analyze both long-term and short-term dynamics and cointegration. The findings reveal that economic growth, fossil fuel usage, and urbanization reduce Mexico’s load capacity factor, thereby diminishing environmental quality. In contrast, the adoption of renewable energy sources and the influence of financial globalization exhibit positive effects on the load capacity factor over the long and short term. These outcomes remain consistent even when compared with alternative estimation techniques, including dynamic ordinary least squares (DOLS), fully modified least squares (FMOLS), and canonical cointegrating regression (CCR). As a priority, Mexican policymakers should accelerate the transition to renewable energy sources, encourage sustainable urban development, and foster a more ecologically conscious economic agenda. Furthermore, promoting greener technologies can enhance the load capacity and mitigate environmental degradation. Ultimately, Mexico can establish an environment conducive to expanding sustainable investments by encouraging cross-border investments, enabling global trade in financial services, and cultivating greater integration of capital and financial markets.

Keywords: load capacity factor; fossil fuel; ecological degradation; financial globalization; renewable energy; sustainable development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/18/13462/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/18/13462/ (text/html)

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:gam:jsusta:v:15:y:2023:i:18:p:13462-:d:1235619

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().