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The Financial development-renewable energy consumption nexus in Africa: Does governance quality matter?

Author

Listed:
  • Toyo A. M. Dossou

    (University of Abomey-Calavi in Benin)

  • Dossou K. Pascal

    (Gbégamey-Cotonou, Benin)

  • Emmanuelle N. Kambaye

    (Wenjiang District, Chengdu, China)

  • Simplice A. Asongu

    (Yaoundé, Cameroon)

  • Alastaire S. Alinsato

    (Gbégamey-Cotonou, Benin)

Abstract

Although the impact of financial development on renewable energy consumption has been extensively examined in recent years, the study regarding the moderation of governance quality on the financial development on renewable energy consumption nexus is sparse. By filling the gap in the energy economics literature, this study investigates the moderating effect of governance quality on the relationship between financial development on renewable energy consumption for a panel of 33 African countries over the period 2000-2020. The fully modified ordinary least square (FMOLS) estimation techniques has been used to account for the cointegration and cross-sectional dependence, respectively. The results unveil that the impact of governance quality and financial development on renewable energy consumption is negative and statistically significant. Moreover, the results reveal that the FD-governance quality interactions are significant and negative. Governance quality thresholds at which the negative incidence of financial development on renewable energy consumption is completely nullified are 0.825; 2.15; 2.86; 3.52;3.36; and 0,1, respectively.

Suggested Citation

  • Toyo A. M. Dossou & Dossou K. Pascal & Emmanuelle N. Kambaye & Simplice A. Asongu & Alastaire S. Alinsato, 2024. "The Financial development-renewable energy consumption nexus in Africa: Does governance quality matter?," Working Papers of the African Governance and Development Institute. 24/020, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:24/020
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    References listed on IDEAS

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    1. Isaac Kwesi Ofori & Toyo Amègnonna Marcel Dossou & Seyi Saint Akadiri, 2023. "Towards the quest to reduce income inequality in Africa: is there a synergy between tourism development and governance?," Current Issues in Tourism, Taylor & Francis Journals, vol. 26(3), pages 429-449, February.
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    5. Kim, Jeayoon & Park, Kwangwoo, 2016. "Financial development and deployment of renewable energy technologies," Energy Economics, Elsevier, vol. 59(C), pages 238-250.
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    Keywords

    Financial development; renewable energy consumption; governance quality; Africa;
    All these keywords.

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