Biomass energy consumption and financial development: evidence from some developing countries

Abstract

The importance of renewable energy in the economic structures of countries is increasing and biomass is one of the most widely used renewable energy types. In this paper, the nexus between biomass energy consumption (BEC) and financial development (FD) for developing countries in the period between 1990 and 2018 has been investigated with Konya (2006) bootstrap panel causality tests, Westerlund (2006) panel cointegration with multiple breaks, CCE and AMG panel cointegration estimator are suitable for cross-section dependency and heterogenous panels. According to empirical findings, BEC and FD have cointegrated in the long-run and this relationship is positive. Moreover, the growth hypothesis is valid for Argentina, Bolivia, Mexico, Uruguay and El-Salvador; neutrality hypothesis is valid for Chile, Colombian, Peru, Turkey and Panama.

Keywords

• biomass energy consumption
• financial development
• developing countries
• panel cointegration
• panel causality