Financial Globalization and Energy Security: Insights from 123 Countries

Liyun Liu () and Simei Zhou
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Liyun Liu: Business School, Qingdao University of Technology, Qingdao 266520, China
Simei Zhou: School of Economics and Management, China University of Petroleum (East China), Qingdao 266580, China

Sustainability, 2025, vol. 17, issue 9, 1-23

Abstract: In this paper, a panel smooth transition regression model is used to examine the nonlinear effects of financial globalization on energy security. These effects are examined in 123 countries for the period of 2000–2018. Control variables are armed forces, industrialization rate, trade value share, and urbanization rate, and the conversion variable is the financial globalization index in the following year. The results of the financial globalization effects can be obtained from both time and space. The results show that financial globalization has a positive nonlinear effect on energy security. When the logarithm of financial globalization in the previous year exceeds 0.0467, the coefficient between financial globalization and energy security will decrease from 0.0467 to 0.0209. Temporal variation analyses show that the positive effect followed a “decrease, increase, decrease” trend between 2000 and 2018. Spatial variation analyses show that the positive effect is greatest in Oceania and the Americas (with an effect coefficient of 0.0467) and smallest in Europe (with an effect coefficient of 0.0391). According to the results of the regional heterogeneity research, the Organization of the Petroleum Exporting Countries (OPEC) countries see a stronger nonlinear impact of financial globalization on energy security than non-OPEC countries.

Keywords: energy security evaluation; financial globalization; panel smooth transition egression model; nonlinear effects (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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