On the asymmetric effects of financial deepening on renewable and non-renewable energy consumption: insights from China

Wang Lei, Ilhan Ozturk, Hafeez Muhammad and Sana Ullah

Economic Research-Ekonomska Istraživanja, 2022, vol. 35, issue 1, 3961-3978

Abstract: One of the strategic objectives of China is to increase renewable energy consumption by reducing non-renewable energy consumption. This motivates us to carefully investigate the asymmetric effects of financial deepening on renewable and non-renewable energy consumption for China, using annual data from 1990 to 2019. The results show that in China, a positive shock in bank deposits and broad money has a significant increasing effect on renewable energy consumption, while a negative shock in bank deposits and broad money has also a significant increasing effect on renewable energy consumption in the long-run. Moreover, positive change in bank deposits and broad money has an inverse impact on non-renewable energy consumption, while negative change has stimulating non-renewable energy consumption in long run. Thus, government and policymaker's policies aimed at promoting financial deepening in China must be persistent and sustainable to foster renewable energy consumption.

Date: 2022
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DOI: 10.1080/1331677X.2021.2007413

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