Journal of Empirical Economic Research

The Role of Financial Efficiency on Renewable Energy Demand Among OPEC Member Countries

Document Type : Original Article

Authors

kowsar saki 1
Sahar Motamedi 2
hamidreza abdollahian 1

1 Department of Economics and Maritime Insurance, Khorramshahr University of Marine Science and Technology, Khorramshahr, Iran.

2 Assistant professor of Economics, Khorramshahr University of marine Science and Technology

10.22113/jeer.2025.519604.1010
Abstract
Abstract
In response to the deterioration of environmental quality and weather challenges across the globe, international strategies have prioritized ecological preservation. Contemporary developmental policies often concentrate on greening production systems worldwide. Integrating renewable energy into the global energy composition not only alleviates reliance on fossil fuels but also serves as an adjunct to global non renewable reserves. The provision of capital for renewable energy projects and technologies is vital for economies. Therefore, the procurement of investment for large scale projects, especially those related to energy, remains constrained in developing economies due to their special status, underscoring the necessity of selecting proper financing mechanisms. This study aims to investigate the role of financial efficiency on renewable energy demand in OPEC member countries over the period 1995-2021, using panel data analysis. Findings reveal that financial system indicators have a significant negative effect on renewable energy demand, but real interest rates and nominal exchange rates demonstrate a significant positive impact. The negative impact of financial efficiency on renewable energy demand suggests that as financial systems in OPEC member countries increase, their renewable energy demand tends to diminish.

Keywords

Financial Efficiency
Energy Demand
Renewable Energy
OPEC Member Countries
Journal of Empirical Economic Research
Volume 1, Issue 2
Autumn 2024
Pages 16-22

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