Financial development and energy poverty: global evidence.
Canh Phuc Nguyen1, Thanh Dinh Su2, Tung Duy Bui3
1School of Public Finance, University of Economics Ho Chi Minh City, 59C Nguyen Dinh Chieu, District 3, Ho Chi Minh City, 700000, Vietnam. canhnguyen@ueh.edu.vn.
Summary
Financial development can reduce energy poverty, particularly in low- and lower-middle-income countries. This study examines its multidimensional impacts across various economies, confirming its alleviating effects.
Area of Science:
- Economics
- Development Studies
- Energy Policy
Background:
- Energy poverty remains a significant global challenge, hindering socioeconomic development.
- Understanding the drivers of energy poverty is crucial for effective policy interventions.
- The role of financial development in mitigating energy poverty requires comprehensive analysis.
Purpose of the Study:
- To investigate the determinants of energy poverty, focusing on the impact of financial development.
- To analyze the multidimensional effects of financial development on energy poverty indicators.
- To examine these effects across different income groups of economies.
Main Methods:
- Utilized a global sample of 65 economies (36 low/lower-middle-income, 29 upper-middle-income) from 2002-2015.
- Applied various econometric estimation techniques.
- Assessed financial development across two subsectors and three dimensions concerning five energy poverty indicators.
Main Results:
- Financial development demonstrates a significant capacity to alleviate energy poverty.
- The positive effects are consistent across different subsectors and dimensions of financial development.
- Reductions in energy poverty were observed in low- and lower-middle-income economies, with heteroscedastic effects in upper-middle-income economies.
Conclusions:
- Financial development is a key determinant in reducing energy poverty, especially in developing economies.
- Policy strategies should consider leveraging financial sector growth to address energy access issues.
- Further research may explore the nuanced, heteroscedastic impacts in higher-income developing nations.
Keywords:
Clean fuels and technologiesElectricity accessElectricity efficiencyEnergy povertyFinancial developmentRenewable electricityMore Related Videos
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