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The Role Of Financial Development On The Share Of Renewable Energy In Japan: A Comprehensive Time-Series Analysis

Author

Listed:
  • ADEM GÖK

    (Department of Economics, Kırklareli University, Kırklareli, Turkiye)

  • CANER DEMIR

    (Salihli FEAS, Department of Economics, Manisa Celal Bayar University, Manisa, Turkiye)

Abstract

The purpose of this study is to analyze the effect of financial development (FD) on the share of renewable energy (RE) usage in Japan. The existing theoretical literature and empirical analyses covering different country cases reveal that FD might have positive, negative, or insignificant effect on RE use. Since there is no empirical investigation of the issue for Japan, the study aims to contribute to the literature. To that end, we used several time-series techniques to detect the association between RE usage and FD in Japan over the 1970–2020 period. The results obtained from the ARDL, Hatemi-J, Maki, Tsong et al. and NARDL cointegration tests showed that there is a significant cointegrated relationship between the share of RE use, FD, GDP per capita and trade openness. As for the long-run coefficients obtained from the ARDL, FMOLS, CCR and NARDL estimators revealed that increases in FD and trade openness raise the share of RE usage while increases in GDP per capita reduce it. Briefly, for the Japan case, we may suggest that improving the financial market structure of the country will bear fruit in terms of the share of cleaner and sustainable energy usage.

Suggested Citation

  • Adem Gã–K & Caner Demir, 2024. "The Role Of Financial Development On The Share Of Renewable Energy In Japan: A Comprehensive Time-Series Analysis," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 69(04), pages 1415-1437, June.
    • Handle: RePEc:wsi:serxxx:v:69:y:2024:i:04:n:s0217590824450036
    DOI: 10.1142/S0217590824450036
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    More about this item

    Keywords

    Cointegration; financial development; GDP per capita; renewable energy; time — series analysis; trade openness;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G00 - Financial Economics - - General - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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