Please use this identifier to cite or link to this item: http://hdl.handle.net/20.500.12323/3790
Title: The Impact of Financial Development on Energy Consumption: Evidence from an Oil-Rich Economy
Authors: Mukhtarov, Shahriyar
Mikayilov, Jeyhun I.
Mammadov, Jeyhun
Mammadov, Elvin
Keywords: Energy consumption
financial development
economic growth
VECM
Azerbaijan
Issue Date: 13-Jun-2018
Citation: Energies — Open Access Journal of Energy Research, Engineering and Policy
Series/Report no.: Vol. 11;Issue 6
Abstract: This paper examines the relationship between energy consumption, financial development, and economic growth in an oil-rich economy—Azerbaijan—employing cointegration techniques to the data ranging from 1992 to 2015. The results confirm the existence of a long-run relationship among the variables. Also, we find that there is a positive and statistically significant impact of financial development and economic growth on energy consumption in the long-run. The positive and statistically significant coefficient of financial development and decreasing volatility in the proxy for financial development over time can be considered as improvements in the financial system. Estimation results show that a 1% increase in financial development, proxied by the private credit indicator, and economic development increases energy consumption by 0.19% and 0.12%, respectively. The positive and significant impact of financial development on energy consumption on the backdrop of relatively cheaper energy prices due to rich oil and gas resources, should be considered by policymakers in their energy use, financial development, and economic growth related decisions.
URI: http://hdl.handle.net/20.500.12323/3790
ISSN: 1996-1073
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