An Econometric Analysis on Financial Determinants of Renewable Energy Investments in Developing Countries

Yıl 2021, Cilt: 6 Sayı: IERFM Özel Sayısı, 79 - 96, 30.12.2021

Kenan İlarslan

https://doi.org/10.30784/epfad.1020454

Cited By: 1

Öz

Although it is one of the most important causes of global warming and climate change, the fact that fossil resources are depleted and can be imported for most countries brings with it the problem of energy supply security. For these reasons, there has been a serious trend towards the production of energy from alternative sources in the world in recent years. This study examined the effect of financial development level and foreign direct investment on renewable energy investments from the perspective of 19 developing countries. The share of renewable energy in total energy production is considered as the dependent variable while the level of financial development and foreign direct capital inflows are considered independent variables. According to the econometric analyses made within the fixed effect MM-QR regression model framework, although the impact of the financial ecosystem on renewable energy production in developing countries is positive, this effect was not statistically significant at any quantile level. On the other hand, although the impact of foreign direct investment on renewable energy production is negative, this situation is statistically substantial at medium and high quantile levels. In addition, it can be said that this study offers important policy implications to those concerned.

Anahtar Kelimeler

Renewable Energy, Financial Development, Foreign Direct Investment

Gelişmekte Olan Ülkelerde Yenilenebilir Enerji Yatırımlarının Finansal Belirleyicileri Üzerine Ekonometrik Bir Analiz

Öz

Küresel ısınma ve iklim değişikliğinin en önemli nedenlerinden biri olmasına rağmen, fosil kaynakların tükenmesi ve çoğu ülke için ithal edilebilmesi, enerji arz güvenliği sorununu da beraberinde getirmektedir. Bu nedenlerle dünyada son yıllarda alternatif kaynaklardan enerji üretimine yönelik ciddi bir eğilim görülmektedir. Bu çalışmada yenilenebilir enerji yatırımları üzerinde finansal gelişmişlik düzeyi ve doğrudan yabancı sermaye yatırımlarının etkisi, gelişmekte olan 19 ülke perspektifinden incelenmiştir. Toplam enerji üretimi içerisindeki yenilenebilir enerjinin payı bağımlı değişken, finansal gelişmişlik düzeyi ve doğrudan yabancı sermaye girişleri ise bağımsız değişken olarak ele alınmıştır. Sabit etkili MM-QR regresyon modeli çerçevesinde yapılan ekonometrik analizlere göre gelişmekte olan ülkelerde yenilenebilir enerji üretimi üzerinde finansal ekosistemin etkisi pozitif olmakla birlikte bu etki hiçbir kantil düzeyinde istatistiksel olarak anlamlı değildir. Buna karşın doğrudan yabancı sermaye yatırımlarının yenilenebilir enerji üretimi üzerindeki etkisi negatif olmakla birlikte bu durum orta ve yüksek kantil seviyelerinde istatistiksel olarak anlamlıdır. Ayrıca bu çalışmanın ilgililere önemli politika çıkarımları sunduğu söylenebilir.

Anahtar Kelimeler

Yenilenebilir Enerji, Finansal Gelişme, Doğrudan Yabancı Sermaye

Kaynakça

• Acheampong, A. O. (2019). Modelling for insight: Does financial development improve environmental quality? Energy Economics, 83, 156–179. doi:10.1016/j.eneco.2019.06.025
• Alsagr, N. and van Hemmen, S. (2021). The impact of financial development and geopolitical risk on renewable energy consumption: Evidence from emerging markets. Environmental Science and Pollution Research, 28(20), 25906-25919. doi:10.1007/s11356-021-12447-2
• Ankrah, I. and Lin, B. (2020). Renewable energy development in Ghana: Beyond potentials and commitment. Energy, 198, 117356. https://doi.org/10.1016/j.energy.2020.117356
• Anton, S. G. and Nucu, A. E. A. (2020). The effect of financial development on renewable energy consumption. A panel data approach. Renewable Energy, 147, 330-338. doi:10.1016/j.renene.2019.09.005
• Assi, A. F., Isiksal, A. Z. and Tursoy, T. (2021). Renewable energy consumption, financial development, environmental pollution, and innovations in the ASEAN+ 3 group: Evidence from (P-ARDL) model. Renewable Energy, 165, 689-700. doi:10.1016/j.renene.2020.11.052
• Belaïd, F., Elsayed, A. H. and Omri, A. (2021). Key drivers of renewable energy deployment in the MENA Region: Empirical evidence using panel quantile regression. Structural Change and Economic Dynamics, 57, 225-238. doi:10.1016/j.strueco.2021.03.011
• Boutabba, M. A. (2014). The impact of financial development, income, energy and trade on carbon emissions: Evidence from the Indian Economy. Economic Modelling, 40, 33-41. doi:10.1016/j.econmod.2014.03.005
• Bulus, G. C. and Koc, S. (2021). The effects of FDI and government expenditures on environmental pollution in Korea: The pollution haven hypothesis revisited. Environmental Science and Pollution Research, 28(2), 1-16. doi:10.1007/s11356-021-13462-z
• Caglar, A. E. (2020). The importance of renewable energy consumption and FDI inflows in reducing environmental degradation: Bootstrap ARDL bound test in selected 9 countries. Journal of Cleaner Production, 264, doi:10.1016/j.jclepro.2020.121663
• Charfeddine, L. and Khediri, K. B. (2016). Financial development and environmenta inquality in UAE: Cointegration with structural breaks. Renewable and Sustainable Energy Reviews, 55, 1322-1335. doi: 10.1016/j.rser.2015.07.059
• Charfeddine, L. and Kahia, M. (2019). Impact of renewable energy consumption and financial development on CO2 emissions and economic growth in the mena region: A panel vector autoregressive (PVAR) analysis. Renewable Energy, 139, 198-213. doi:10.1016/j.renene.2019.01.010
• Chen, Z., Paudel, K. P. and Zheng, R. (2021). Pollution halo or pollution haven: assessing the role of foreign direct investment on energy conservation and emission reduction. Journal of Environmental Planning and Management, 65(2), 311-336. doi:10.1080/09640568.2021.1882965
• D’orazio, P. and Dirks, M. W. (2020). The impact of climate-related fiscal and financial policies on carbon emissions in G20 countries: A panel quantile regression approach (Ruhr Economic Papers No. 860). Retrieved from https://www.rwi-essen.de/media/content/pages/publikationen/ruhr-economic-papers/rep_20_860.pdf
• Demena, B. A. and Afesorgbor, S. K. (2020). The effect of FDI on environmental emissions: Evidence from a meta-analysis. Energy Policy, 138, 111192. doi:10.1016/j.enpol.2019.111192
• Doğan, E. ve Doğan, B.Ö. (2021). Finansal gelişme ve inovasyon, Türkiye’de yenilenebilir enerji üretimini artırıyor mu? Turkish Studies - Economy, 16(2), 783-797. doi:10.47644/TurkishStudies.47359
• Doytch, N. and Narayan, S. (2016). Does FDI influence renewable energy consumption? An analysis of sectoral FDI impact on renewable and non-renewable industrial energy consumption. Energy Economics, 54, 291-301. doi:10.1016/j.eneco.2015.12.010
• Duan, Y. and Jiang, X. (2021). Pollution haven or pollution halo? A re-evaluation on the role of multinational enterprises in global CO2 emissions. Energy Economics, 97, 105181. doi:10.1016/j.eneco.2021.105181
• Erdogan, S. and Solarin, S. A. (2021). Stochastic convergence in carbon emissions based on a new Fourier-based wavelet unit root test. Environmental Science and Pollution Research, 28(17), 21887-21899. https://doi.org/10.1007/s11356-020-12033-y
• Eren, B. M., Taspinar, N. and Gokmenoglu, K. K. (2019). The impact of financial development and economic growth on renewable energy consumption: Empirical analysis of India. Science of the Total Environment, 663, 189-197. doi:10.1016/j.scitotenv.2019.01.323
• Fangmin, L. and Jun, W. (2011). Financial system and renewable energy development: Analysis based on different types of renewable energy situation. Energy Procedia, 5, 829-833. doi:10.1016/j.egypro.2011.03.146
• Guo, Y. (2021). Financial development and carbon emissions: Analyzing the role of financial risk, renewable energy electricity, and human capital for China. Discrete Dynamics in Nature and Society, 2021, 1025669. doi:10.1155/2021/1025669
• Guven, D., Kayalıca, M. and Kayakutlu, G. (2020). CO2 emission analysis for East European countries: The role of underlying emission trend. Environmental Economics, 11, 67-81. doi:10.21511/ee.11(1).2020.07
• Guzel, A. E. and Okumus, I. (2020). Revisiting the pollution haven hypothesis in ASEAN-5 countries: New insights from panel data analysis. Environmental Science and Pollution Research, 27, 18157-18167. doi:10.1007/s11356-020-08317-y He, L., Liu, R., Zhong, Z., Wang, D. and Xia, Y. (2019). Can green financial development promote renewable energy investment efficiency? A consideration of bank credit. Renewable Energy, 143, 974-984. https://doi.org/10.1016/j.renene.2019.05.059
• Isık, N. (2019). The pollution haven hypothesis and foreign direct investments: Evidence from the Central Asian Turkic Republics. Eurasian Research Journal, 1(1), 34-50. Retrieved from https://dergipark.org.tr/en/pub/erj/
• Ji, Q. and Zhang, D. (2019). How much does financial development contribute to renewable energy growth and upgrading of energy structure in China? Energy Policy, 128, 114-124. doi:10.1016/j.enpol.2018.12.047
• Kang, X., Khan, F. U., Ullah, R., Arif, M., Rehman, S. U. and Ullah, F. (2021). Does foreign direct investment influence renewable energy consumption? Empirical evidence from South Asian countries. Energies, 14(12), 3470. doi:10.3390/en14123470
• Khan, A., Y. Chenggang, J. Hussain and Z. Kui (2021). Impact of technological innovation, financial development and foreign direct investment on renewable energy, non-renewable energy and the environment in Belt & Road Initiative countries. Renewable Energy, 171, 479-491. doi:10.1016/j.renene.2021.02.075
• Khan, H., Khan, I. and Binh, T. T. (2020). The heterogeneity of renewable energy consumption, carbon emission and financial development in the globe: A panel quantile regression approach. Energy Reports, 6, 859-867. doi:10.1016/j.egyr.2020.04.002
• Khan, M. T. I., Yaseen, M. R. and Ali, Q. (2019). Nexus between financial development, tourism, renewable energy, and greenhouse gas emission in high-income countries: a continent-wise analysis. Energy Economics, 83, 293-310. doi: 10.1016/j.eneco.2019.07.018
• Kim, J. and Park, K. (2018). Financial development and deployment of renewable energy technologies. Energy Economics, 59, 238-250. doi:0.1016/j.eneco.2016.08.012
• Lahiani, A., Mefteh-Wali, S., Shahbaz, M. and Vo, X. V. (2021). Does financial development influence renewable energy consumption to achieve carbon neutrality in the USA? Energy Policy, 158, 112524. doi:10.1016/j.enpol.2021.112524
• Le, T. H., Nguyen, C. P. and Park, D. (2020). Financing renewable energy development: Insights from 55 countries. Energy Research & Social Science, 68, 101537. doi:10.1016/j.erss.2020.101537
• Lin, B. and Omoju, O. E. (2017). Focusing on the right targets: Economic factors driving non-hydro renewable energy transition. Renewable Energy, 113, 52-63. doi:10.1016/j.renene.2017.05.067
• Lingyan, M., Zhao, Z., Malik, H. A., Razzaq, A., An, H. and Hassan, M. (2021). Asymmetric impact of fiscal decentralization and environmental innovation on carbon emissions: Evidence from highly decentralized countries. Energy & Environment, Advance online publication. doi:10.1177/0958305X211018453
• Liu, Q., Wang, S., Zhang, W., Zhan, D. and Li, J. (2018). Does foreign direct investment affect environmental pollution in China's cities? A spatial econometric perspective. Science of The Total Environment, 613, 521-529. doi:10.1016/j.scitotenv.2017.09.110
• Liu, S. J. and Xu, X. L. (2021). The pollution halo effect of technology spillover and pollution haven effect of economic growth in agricultural foreign trade: Two sides of the same coin? Environmental Science and Pollution Research, 28, 20157-20173. doi:10.1007/s11356-020-11786-w
• Lv, Z. and Li, S. S. (2021). How financial development affects CO2 emissions: A spatial econometric analysis. Journal of Environmental Management, 277, 111397. doi:10.1016/j.jenvman.2020.111397
• Machado, J. A. F. and Silva, J. M. C. S. (2019). Quantiles via moments. Journal of Econometrics, 213(1), 145-173. doi:10.1016/j.jeconom.2019.04.009
• Mert, M. and Bölük, G. (2016). Do foreign direct investment and renewable energy consumption affect the CO2 emissions? New evidence from a panel ARDL approach to Kyoto annex countries. Environmental Science and Pollution Research, 23, 21669-21681. doi:10.1007/s11356-016-7413-7
• Mert, M., Bölük, G. and Çağlar, A. E. (2019). Interrelationships among foreign direct investments, renewable energy, and CO2 emissions for different european country groups: A panel ARDL approach. Environmental Science and Pollution Research, 26, 21495-21510. doi:10.1007/s11356-019-05415-4
• Murshed, M., Elheddad, M., Ahmed, R., Bassim, M. and Than, E. T. (2021). Foreign direct investments, renewable electricity output, and ecological footprints: Do financial globalization facilitate renewable energy transition and environmental welfare in Bangladesh? Asia-Pacific Financial Markets, 1-46. doi:10.1007/s10690-021-09335-7
• Nathaniel, S., Aguegboh, E., Iheonu, C., Sharma, G. and Shah, M. (2020). Energy consumption, FDI, and urbanization linkage in coastal Mediterranean countries: Re-assessing the pollution haven hypothesis. Environmental Science and Pollution Research, 27(28), 35474-35487. doi:10.1007/s11356-020-09521-6
• Neves, S. A., Marques, A. C. and Patrício, M. (2020). Determinants of CO2 emissions in European Union countries: Does environmental regulation reduce environmental pollution? Economic Analysis and Policy, 68, 114-125. doi:10.1016/j.eap.2020.09.005
• Pata, U. K. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: Testing EKC hypothesis with structural breaks. Journal of Cleaner Production, 187, 770-779. doi:10.1016/j.jclepro.2018.03.236
• Polat, B. (2018). The influence of FDI on energy consumption in developing and developed countries: A dynamic panel data approach. Journal of Yasar University, 13(49), 33-42. Retrieved from https://web.s.ebscohost.com/
• Polemis, M. (2019). A note on the estimation of competition-productivity nexus: A panel quantile approach (MPRA Paper No. 96808). Retrieved from https://mpra.ub.uni-muenchen.de/96808/1/MPRA_paper_96808.pdf
• Qamruzzaman, M. and Jianguo, W. (2020). The asymmetric relationship between financial development, trade openness, foreign capital flows, and renewable energy consumption: Fresh evidence from panel NARDL investigation. Renewable Energy, 159, 827-842. doi:10.1016/j.renene.2020.06.069
• Rahman, Z., Chongbo, W. and Ahmad, M. (2019). An (a) symmetric analysis of the pollution haven hypothesis in the context of Pakistan: A non-linear approach. Carbon Management, 10(3), 227-239. doi:10.1080/17583004.2019.1577179
• Shahbaz, M., Topcu, B. A., Sarıgül, S. S. and Vo, X. V. (2021). The effect of financial development on renewable energy demand: The case of developing countries. Renewable Energy, 178, 1370-1380. doi:10.1016/j.renene.2021.06.121
• Shoaib, H. M., Rafique, M. Z., Nadeem, A. M. and Huang, S. (2020). Impact of financial development on CO2 emissions: A comparative analysis of developing countries (D8) and developed countries (G8). Environmental Science and Pollution Research, 27(11), 12461-12475. doi:10.1007/s11356-019-06680-z
• Sirin, S. M. (2017). Foreign direct investments (FDIs) in Turkish power sector: A discussion on investments, opportunities and risks. Renewable and Sustainable Energy Reviews, 78, 1367-1377. doi:10.1016/j.rser.2017.05.160
• Soilita, N. Z. (2017). How does foreign direct investment affect pollution? Toward a better understanding of the direct and conditional effects. Environmental and Resource Economics, 66(2), 293–338. doi:10.1007/s10640-015-9950-9
• Solarin, S. A., Al-Mulali, U., Musah, I. and Ozturk, I. (2017). Investigating the pollution haven hypothesis in Ghana: An empirical investigation. Energy, 124, 706-719. doi: 10.1016/j.energy.2017.02.089
• Sun, C., Zhang, F. and Xu, M. (2017). Investigation of pollution haven hypothesis for China: An ARDL approach with breakpoint unit root tests. Journal of Cleaner Production, 161, 153-164. doi:10.1016/j.jclepro.2017.05.119
• Yang, X., He, L., Xia, Y. and Chen, Y. (2019). Effect of government subsidies on renewable energy investments: The threshold effect. Energy Policy, 132, 156-166. https://doi.org/10.1016/j.enpol.2019.05.039
• Wang, J., Zhang, S. and Zhang, Q. (2021). The relationship of renewable energy consumption to financial development and economic growth in China. Renewable Energy, 170, 897-904. doi:10.1016/j.renene.2021.02.038