Financial Development and Renewable Energy Technology Development in Different Sectors: Application of Panel Tobit Model

Document Type : Research Paper


1 Assistant Professor in Economics, University of Mazandaran, Iran

2 -Assistant Professor in Economics, University of Mazandaran, Iran,

3 -MA Student of Energy Economics, University of Mazandaran, Iran


The importance of renewable energies in sustainable development, greenhouse gas reduction and increase energy supply security on the one hand, and required high level of financing for Renewable energy projects, on the other hand, have enhanced the role and importance of financial development in renewable energy deployment. Due to the importance of this issue, this study tried to evaluate the impact of financial development in the stock market, credit market and whole financial markets on renewable energy technologies (in the four energy sectors including; biomass, hydropower, wind and solar) over the period 2002 till 2015, based on Tobit regression in developed and developing countries. Based on the Results, financial development has a significant effect on renewable technology development regardless of which kind of renewable energy was used. It also led to a reduction in environmental pollution and climate changes, especially in developed countries. The results also indicated that stock market development, credit market development and whole financial market development has the most impact on the renewable technology installation capacity development of solar, biomass, wind and hydropower energies in developed countries, respectively. While financial market development has the most impact on technology installation capacity development of wind, biomass and solar energies in developing countries.
JEL Classification: G2, Q43, C23


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  • Receive Date: 24 August 2018
  • Revise Date: 02 November 2018
  • Accept Date: 06 November 2018
  • First Publish Date: 22 June 2019