TY - JOUR
T1 - The Impact of Financial Development on Energy Demand
T2 - Evidence from China
AU - Liu, Lu
AU - Zhou, Chong
AU - Huang, Junbing
AU - Hao, Yu
N1 - Publisher Copyright:
Copyright © Taylor & Francis Group, LLC.
PY - 2018/1/26
Y1 - 2018/1/26
N2 - An autoregressive distributed lag (ARDL) bounds approach and vector error correction model (VECM) are used here to better understand the role of financial development in energy demand in China. Based on data from 1980 to 2014, the ARDL bounds approach yields empirical evidence that confirms the existence of long-run relationships among energy demand per capita, gross domestic product per capita, urbanization, economic structure, and financial development. The VECM framework shows the direction of Granger causality that combines the short run and the long run between the variables. The results suggest a feedback effect between financial development and energy demand per capita in the long run. However, financial development Granger causes per capita energy demand without a feedback effect in the short run. The results of this research may be of great importance for decision makers as they develop policies on energy and economic growth.
AB - An autoregressive distributed lag (ARDL) bounds approach and vector error correction model (VECM) are used here to better understand the role of financial development in energy demand in China. Based on data from 1980 to 2014, the ARDL bounds approach yields empirical evidence that confirms the existence of long-run relationships among energy demand per capita, gross domestic product per capita, urbanization, economic structure, and financial development. The VECM framework shows the direction of Granger causality that combines the short run and the long run between the variables. The results suggest a feedback effect between financial development and energy demand per capita in the long run. However, financial development Granger causes per capita energy demand without a feedback effect in the short run. The results of this research may be of great importance for decision makers as they develop policies on energy and economic growth.
KW - cointegration analysis
KW - economic structure
KW - energy demand
KW - financial development
KW - urbanization
UR - https://www.scopus.com/pages/publications/85041367148
U2 - 10.1080/1540496X.2017.1358609
DO - 10.1080/1540496X.2017.1358609
M3 - Article
AN - SCOPUS:85041367148
SN - 1540-496X
VL - 54
SP - 269
EP - 287
JO - Emerging Markets Finance and Trade
JF - Emerging Markets Finance and Trade
IS - 2
ER -
