Abstract
The relationship between financial development and energy consumption is the most frequently research field in finance and economy. The main objective of performing this study is to answer that is there a relationship between financial development and renewable energy consumption in emerging countries? In many studies carried out in literature, the empirical findings were pointing to the existence of thiss relationship. To examine the relationship between financial development and renewable energy consumption, a total of 20 emerging countries were obtained from annual frequency data between 1990 and 2015. The system GMM estimation was used as the method of study. As a result of the analysis performed, it indicates that financial development does not impact renewable energy consumption in emerging countries when financial development is measured using both banking and stock market variables. Additionally, it can be said that the financial development increases renewable energy consumption if it is measured by only stock market capitalization.
Highlights
The development of monetary and capital markets has great prospects for stabilization and the establishment of a financially stronger economic infrastructure
This paper examines financial development and renewable energy consumption from 1990 to using system generalized method of moments (GMM) estimators
We examine the dynamic relationships between financial development and renewable energy consumption during the period 1990–2015 handling system-GMM model with a strongly stabilized data for 20 emerging countries
Summary
The development of monetary and capital markets has great prospects for stabilization and the establishment of a financially stronger economic infrastructure. The way to make more investments is through increasing the savings, which are the source of the investments Another factor that is thought to be important for countries to attain the growth targets and financial development level they want to achieve in the long run is the energy policies of the countries. Energy sources, which are such an indispensable factor for the economy, can be classified in many different ways One of these classifications can be divided into renewable and non-renewable energy sources. Most of the increasing global energy demand is met by non-renewable energy sources, known as fossil fuels. Apart from financial development, there are a wide range of studies examining the relation between renewable energy and other factors such as economic growth, income, wealth, oil prices and carbon dioxide emissions. The coming parts of the study presented the theoretical background, literature, empirical model and methodology, empirical results and conclusion
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