Abstract
Abstract No substantial evidence available in existing literature regarding the pattern of financial development, trade openness and foreign capital effect on renewable energy consumption. With this study, we tried to fill the gap by figuring out the answer to the question of whether the relationships between financial development, trade openness, capital flows and the renewable energy consumption is symmetric or asymmetric by applying Panel Non-linear Autoregressive Distributed Lagged from 1990 to 2017. Non-linear estimation confirms the long-run asymmetric relationships between financial development, trade openness, capital flows, and renewable energy consumption in the case of all three subsamples namely, low-income countries, middle-income countries, and upper-middle-income panel. Furthermore, in the short-run, the asymmetric relationship also confirms except in Lower-income countries. We, furthermore, investigate the directional causality with System-GMM specification under the error correction model. Findings unveiled the long-run causality in particular when renewable energy consumption treated as a dependent variable in the equation.
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