Financial development and energy consumption nexus in 32 belt and road economies

Current study sheds the light on the financial development-energy nexus in 32 Belt and Road economies during 2000-2015. Financial development is proxied by domestic credit to private sector. We first examine the order of integration by employing five different panel unit-root tests. Further, we confirm long-term relationship between the variables by running Pedroni and Kao panel cointegration tests. Fully modified ordinary least squares (FMOLS) regression reveal positive long-term relationship between financial development and energy use. Results of Dumitrescu-Hurlin panel causality test fail to reveal causal relationship between financial development and energy in our sample.