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Asymmetric impact of financial development on renewable energy consumption in Ghana

Author

Listed:
  • Kwadwo Boateng Prempeh

    (Sunyani Technical University)

  • Christian Kyeremeh

    (Sunyani Technical University)

  • Samuel Asuamah Yeboah

    (Sunyani Technical University)

  • Felix Kwabena Danso

    (Sunyani Technical University)

Abstract

This study investigates the impact of financial development on renewable energy consumption in Ghana, considering the influence of economic growth and energy prices. Employing a nonlinear autoregressive distributed lag (NARDL) approach, we capture the asymmetric effects of both positive and negative shocks in financial development on renewable energy demand from 1990 to 2020. Our findings reveal that positive shocks in financial development significantly increase long-run renewable energy consumption by 0.445%. Concomitantly, adverse shocks in financial development have a substantial negative impact, leading to a long-run decrease in renewable energy consumption by 0.424%. Additionally, the analysis demonstrates that both economic growth and energy prices significantly negatively influence renewable energy consumption. These results suggest that policymakers in Ghana should consider strategies that promote financial development and mitigate the adverse effects of economic growth and energy prices to foster a sustainable transition towards renewable energy.

Suggested Citation

  • Kwadwo Boateng Prempeh & Christian Kyeremeh & Samuel Asuamah Yeboah & Felix Kwabena Danso, 2024. "Asymmetric impact of financial development on renewable energy consumption in Ghana," SN Business & Economics, Springer, vol. 4(9), pages 1-23, September.
    • Handle: RePEc:spr:snbeco:v:4:y:2024:i:9:d:10.1007_s43546-024-00689-4
    DOI: 10.1007/s43546-024-00689-4
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    More about this item

    Keywords

    Financial development; Renewable energy consumption; Income; Energy prices; NARDL;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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