The Effect of Financial Development on Energy Intensity in China

The relationship between financial development and energy intensity is yet firmly established as the literature is emerging, and the few empirical studies that have been done provide conflicting results. Whereas some conclude a U-shaped relationship between financial development and energy intensity, others show a linear relationship between the two variables. This study investigates the relationship between financial development and energy intensity by focusing on the role of Islamic financial development. The study covers 30 countries where Islamic banks are present. Using the fixed-effects panel model, the empirical results suggest that Islamic banking development significantly increases energy intensity in the sample countries. We also identify other important factors that increase energy intensity. These include carbon emissions, renewable energy use and energy imports. The findings point to the importance of designing policies to incentivize Islamic banks and Shari'ah-compliant investors to finance clean energy technologies as a potent tool for reducing energy intensity, achieving sustainable development, and greening Islamic finance.

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Energy Intensity Determinants Based on Structure-oriented Cointegration by Embedding a Knowledge Box in a Time Series Model: Evidence From Iran

10.21203/rs.3.rs-263118/v1 ◽

2021 ◽

Author(s):

Parisa Esmaeili ◽

Meysam Rafei

Keyword(s):

Financial Development ◽

Energy Intensity ◽

Trade Openness ◽

Decomposition Analysis ◽

Directed Acyclic Graphs ◽

Impulse Response Functions ◽

Government Investment ◽

Long Run ◽

Oil Revenues ◽

The Impact

Abstract Energy intensity reduction is an exigent issue for Iran, where energy consumption is so high. Therefore, finding effective policies to reduce energy intensity is important. With this in mind, the impact of financial development, government investment, oil revenues, and trade openness on energy intensity is assessed in this study. We combined Structural Vector Error Correction Model (SVECM) and Directed Acyclic Graphs (DAG) technique to examine the relationships between study variables. The results of DAG prove that financial development, government investment, oil revenues, and trade openness influence the intensity of energy. Besides, the significant and long-run relationships among variables allowed us to apply SVECM. Impulse response functions and variance decomposition analysis indicate that government investment, oil revenues, and trade openness are negatively associated with the intensity of energy. Also, financial development positively influences energy intensity. Meanwhile, the impact of government investment is greater than oil revenues, trade openness, and financial development impacts. So, Government investment is the most effective policy regarding optimizing the consumption of energy and reducing energy intensity. We also advise policymakers to use oil revenues to increase government investment, enhancing the level of trade openness, and tax to the private sector to improve the level of energy intensity.

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MULTIVARIATE GRANGER CAUSALITY BETWEEN CO2 EMISSIONS, ENERGY INTENSITY AND ECONOMIC GROWTH IN PORTUGAL: EVIDENCE FROM COINTEGRATION AND CAUSALITY ANALYSIS

Technological and Economic Development of Economy ◽

10.3846/20294913.2014.989932 ◽

2015 ◽

Vol 22 (1) ◽

pp. 47-74 ◽

Cited By ~ 44

Author(s):

Muhammad SHAHBAZ ◽

Farooq Ahmed JAM ◽

Sadia BIBI ◽

Nanthakumar LOGANATHAN

Keyword(s):

Economic Growth ◽

Granger Causality ◽

Co2 Emissions ◽

Financial Development ◽

Unit Root ◽

Energy Efficient ◽

Energy Intensity ◽

Causality Analysis ◽

Long Run ◽

Vecm Granger Causality

The present study aims to investigate the relationship between economic growth, energy intensity and CO2 emissions by incorporating financial development in CO2 emissions function using Portuguese annual data over the period of 1971–2011. The unit root problem of variables is examined by applying Zivot-Andrews unit root test and the ARDL bounds testing approach is for long run relationship. The direction of causal relationship between the series is examined by the VECM Granger causality approach and robustness of causality analysis is tested by innovative accounting approach (IAA). Our empirical evidence confirmed that the variables are cointegrated for long run relationship. The results exposed that economic growth and energy intensity increase CO2 emissions, while financial development condenses it. The VECM Granger causality analysis showed the feedback effect between energy intensity and CO2 emissions, while economic growth and financial development Granger cause CO2 emissions. The study suggests that environment degradation can be controlled by using energy efficient technologies. Financial development can also play its role in improving the environmental quality by encouraging investment in energy efficient technology to enhance domestic production and save the environment from degradation.

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Links among energy intensity, non-linear financial development, and environmental sustainability: New evidence from Asia Pacific Economic Cooperation countries

Journal of Cleaner Production ◽

10.1016/j.jclepro.2021.129747 ◽

2021 ◽

pp. 129747

Author(s):

Irfan Khan ◽

Fujun Hou ◽

Abdulrasheed Zakari ◽

Muhammad Irfan ◽

Munir Ahmad

Keyword(s):

Financial Development ◽

Environmental Sustainability ◽

Energy Intensity ◽

Economic Cooperation ◽

Asia Pacific ◽

Asia Pacific Economic Cooperation ◽

Non Linear ◽

New Evidence

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An Investigation of an Adaptive Neuro-Fuzzy Inference System to Predict the Relationship among Energy Intensity, Globalization, and Financial Development in Major ASEAN Economies

Energies ◽

10.3390/en13040850 ◽

2020 ◽

Vol 13 (4) ◽

pp. 850 ◽

Cited By ~ 14

Author(s):

Hafezali Hussain ◽

Beata Slusarczyk ◽

Fakarudin Kamarudin ◽

Hassanudin Thaker ◽

Katarzyna Szczepańska-Woszczyna

Keyword(s):

Financial Development ◽

Fuzzy Inference System ◽

Energy Intensity ◽

Fuzzy Inference ◽

The Philippines ◽

Nonlinear Behaviour ◽

Inference System ◽

Neuro Fuzzy ◽

Study Results ◽

Asean Countries

The enhancement of the financial sector significantly drives a nation’s economy and thereby increase energy intensity. Considering this situation, the current study aims to examine the link between globalization and financial advancements with the energy intensity of the top 5 ASEAN (Association of Southeast Asian Nations) economies. The development structure of the ASEAN region is considered significant for having stable growth. The authors used the annual data from 1990 to 2018 for five of the largest ASEAN economies: Singapore, Malaysia, Thailand, Indonesia, and the Philippines. The present study used novel methodology, the Adaptive Neuro-Fuzzy Inference System (ANFIS), to examine the nonlinear behaviour among globalization, financial development, and energy intensity in the top 5 ASEAN countries. The study results using ANFIS confirm that globalization and financial development are positively correlated and have a significant impact on the energy intensity level in the top ASEAN countries. The results further suggest that globalization and financial development increase the level of energy intensity more in the countries that are developed relative to their peers in the top ASEAN countries. Moreover, the outcomes of ANFIS also suggest that those countries, which are more globalized and financially developed, have more potential to increase the level of energy intensity. Therefore, the government needs to focus more on projects that involve renewable energy and are environmentally friendly.

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