Nexus among biomass energy consumption, economic growth, and financial development: Evidence from selected 15 countries

Abstract

The objective of this study is to examine the association among biomass energy consumption (BEC), economic growth (EG), and financial development (FD). For this purpose, panel data method is employed for the selected 15 countries (Cameroon, Democratic Congo, Tanzania, Nigeria, Haiti, Nepal, Togo, Mozambique, Ivory Coast, Niger, Kenya, Cambodia, Myanmar, Zimbabwe, Republic of Congo) utilizing the annual data over the period 1993–2017. The cointegration test results indicate the presence of long-run associations among the variables. Causality tests indicate bidirectional relationships among the variables. According to the causality test results, a bidirectional and positive relationship exists between FD and BEC, as well as between BEC and EG.These results support the feedback hypothesis for the selected countries. Overall results indicate that in the selected countries biomass energy investments can boost economic growth and financial development. Findings of the study yield worthy signals for policymakers. The results may serve as a guide for biomass energy usage policies, and more effective decisions can be made by assessing the impacts of biomass energy consumption on economic growth and financial development.

Keywords

• Biomass energy consumption
• Financial development
• Economic growth
• Panel data analysis