THE RELATIONSHIP BETWEEN RENEWABLE ENERGY CONSUMPTION AND FINANCIAL DEVELOPMENT: A RESEARCH ON DEVELOPED COUNTRIES

The main purpose of the study is to test the potential asymmetric interaction between financial development, economic growth, and energy consumption for a panel of G7 countries in the 1980-2018 sample period, with the help of the asymmetric panel causality test developed by Hatemi-J (2020). Though there is no Granger causality relationship between financial development and renewable energy consumption, considering asymmetric effects, a causality relationship from financial development to renewable energy consumption and from renewable energy consumption to financial development has been identified. The results point to an asymmetric interaction in the financial development, renewable energy relationship. Besides, considering the positive and negative components, a causality relationship from renewable energy consumption to growth has been determined. Finally, as growth is the Granger cause of renewable energy consumption, there is a causality relationship from growth to renewable energy consumption based on both positive and negative components.