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Financial Development, Financial Inclusion and Primary Energy Use: Evidence from the European Union Transition Economies

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  • Yilmaz Bayar

    (Faculty of Economics and Administrative Sciences, Bandirma Onyedi Eylul University, Bandirma 102000, Balikesir, Turkey)

  • Mehmet Hilmi Ozkaya

    (Faculty of Economics and Administrative Sciences, Usak University, Usak 64000, Turkey)

  • Laura Herta

    (Department of International Relations and German Studies, Faculty of European Studies, Babeș-Bolyai University, 400084 Cluj-Napoca, Romania)

  • Marius Dan Gavriletea

    (Department of Business, Faculty of Business, Babeș-Bolyai University, 400084 Cluj-Napoca, Romania)

Abstract

The main objective of the research is to analyze the impact of financial sector development indicators and financial institutions access on primary energy use based on a sample of European Union transition members over 20 years period (1996–2017) through panel cointegration and causality tests that allow for cross-section dependence. The causality analysis revealed that the direction of the causality among financial development indicators, financial institutions access, and primary energy use varied among the countries. On the other side, panel cointegration coefficients disclosed that the financial development index positively affected the primary energy use, but private credit did not have a significant effect on the primary energy use. Furthermore, financial institutions’ access had a significant negative impact on primary energy use. However, country-level cointegration coefficients indicated that the financial development index positively affected the primary energy use in Bulgaria, Croatia, Czechia, Hungary, and Slovenia, and private credit also had a positive impact on primary energy use in Bulgaria, Czechia, Estonia, Hungary, Lithuania, Poland, and Slovakia, but the effect of financial development index on primary energy use was found to be very higher than that of private credit. Moreover, financial institutions’ access negatively affected the primary energy use in Croatia, Estonia, Hungary, Poland, and Romania.

Suggested Citation

  • Yilmaz Bayar & Mehmet Hilmi Ozkaya & Laura Herta & Marius Dan Gavriletea, 2021. "Financial Development, Financial Inclusion and Primary Energy Use: Evidence from the European Union Transition Economies," Energies, MDPI, vol. 14(12), pages 1-14, June.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:12:p:3638-:d:577618
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