The Impact of Financial Development on Renewable Energy Consumption: The Case of Vietnam and Other ASEAN Members

Abstract

The purpose of this study was to evaluate the impact of financial development and renewable energy consumption in Vietnam and some selected countries in Southeast Asia. After researching over the period from 1970 to 2022, using quantitative analyses, including the ordinary least squares (OLS), fixed effects method (FEM), and random effects method (REM), and measuring the Driscoll–Kraay standard errors to assess cross-dependence between countries as well as a Dynamic Ordinary Least Squares (DOLS) estimation analysis to evaluate the robustness of the research, the research results confirm that financial development has a negative impact on renewable energy consumption, which reflects the important role of fossil energy sources in meeting energy consumption demand. Similarly, increased per capita income negatively affects renewable energy consumption. This study also confirms the positive impact of foreign direct investment on renewable energy use.