The non-linear relationship between globalization, financial development and energy consumption: Evidence from BRICS economies

In the era of globalization, financial development plays a key role in socioeconomic and environmental development. However, its adverse consequences on human life, environmental hazards, and high energy consumption cannot be ignored. Thus, this study investigates the non-linear relationship between...

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Bibliographic Details
Published in:PloS one 2023-12, Vol.18 (12), p.e0293890-e0293890
Main Authors: Imran, Muhammad, Liu, Xiangyang, Saud, Shah, Akhtar, Muhammad Hanif, Haseeb, Abdul, Wang, Rongyu, Azam, Kamran
Format: Article
Language:English
Subjects:
Analysis
Economic aspects
Economic development
Economic growth
Economic research
Emerging markets
Energy conservation
Energy consumption
Energy development
Energy policy
Energy usage
Environmental aspects
Environmental hazards
Environmental policy
Financial institutions
Globalization
Industrial development
Industrial production
Literature reviews
Securities markets
Sustainable development
Trade restrictions
Urbanization
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Summary:In the era of globalization, financial development plays a key role in socioeconomic and environmental development. However, its adverse consequences on human life, environmental hazards, and high energy consumption cannot be ignored. Thus, this study investigates the non-linear relationship between globalization, financial development, and energy consumption for BRICS economies. In doing so, we have applied second-generation tests to identify cross-sectional dependence in the data. Cross-sectional augmented Dickey-Fuller (CADF) and Cross-sectional Im-Pesaran Shin (CIPS) have been performed to find the stationary level of variables. The long-term equilibrium link between the investigated variables has been established in continuance using the Westerlund Cointegration test. The Dynamic Seemingly Unrelated Regression (DSUR) indicates that U-shaped relationships exist for financial development and globalization with energy consumption. Conversely, there is an inverted U-shaped relationship exist between economic growth and energy consumption in BRICS. The Dumitrescu-Hurlin panel causality test findings show that a unidirectional link runs from energy consumption to financial development, economic growth to energy consumption, and globalization towards energy usage. Important policy implications have also been discussed.
ISSN:1932-6203
1932-6203
DOI:10.1371/journal.pone.0293890