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Environmental Science and Pollution Research

, Volume 25, Issue 24, pp 24326–24337 | Cite as

An empirical analysis of financial development and energy demand: establishing the role of globalization

  • Shah Saud
  • Danish
  • Songsheng Chen
Research Article
  • 120 Downloads

Abstract

The rapid mode of globalization is experienced in the last few years. The acceleration in globalization expands economic activities through a share of knowledge and transfer of technology which influence energy demand. So, the objective of this empirical work is to explore the impact of financial development on energy demand incorporating globalization. The empirical finding is based on autoregressive distributed lag (ARDL) bound testing approach from 1980 to 2016 in case of China. Overall, we infer that financial development increases energy demand in China. Furthermore, the finding shows that globalization has a negative and significant impact on energy demand. The additional determinants, such as economic growth, and urbanization stimulate energy consumption. Besides, energy consumption granger cause financial development in the long-run path. Similarly, unidirectional causality is detected between globalization and energy consumption. The result gives direction to policymakers to preserve as well as to enhance efficient energy consumption and sustain economic growth in China with acceleration in globalization.

Keywords

Energy demand Financial development Globalization ARDL China 

Notes

Acknowledgments

The authors thank two anonymous reviewer’s referees as well as the editor, Dr. Philippe Garrigues, for their constructive comments, which enhanced the presentation of this paper. This work is a research achievement of the National Natural Science Foundation of China under the project of (NSFC-71672009.71372016)

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.School of Management and EconomicsBeijing Institute of TechnologyBeijingChina
  2. 2.Center for Energy and Environmental Policy ResearchBeijing Institute of TechnologyBeijingChina
  3. 3.School of Economics and Trade GuangdongUniversity of Foreign StudiesGuangzhouChina

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