The interplay between financial development, electricity consumption and foreign direct investment in the GCC countries: new insights from GMM panel VAR

IF 3.1 4区 工程技术 Q3 ENERGY & FUELS Energy Sources Part B-Economics Planning and Policy Pub Date : 2022-10-20 DOI:10.1080/15567249.2022.2136875
Hichem Saidi, G. Montasser, Nadia Doytch
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Abstract

ABSTRACT Over the past years, the economies of the Gulf Cooperation Countries (GCC) countries, which hold a large of the world in oil and gas exports, have suffered from dramatic declines in oil prices. This has put pressure on their policymakers to seek relief from their heavy dependence on natural resources and diversify their exports. At the same time, the GCC countries have high electricity consumption due to their severe climatic conditions. This has prompted their policymakers to consider the inevitable shift to environmentally friendly resources for electricity generation. Foreign direct investment, facilitated by the financial systems of these countries, may play an important role in achieving the above objectives. Therefore, the objectives of our paper are to investigate the relationship between foreign direct investment, electricity consumption, and financial development in GCC countries using a novel GMM-Panel VAR approach. Data are observed from 1990 to 2019. We find bidirectional causality between foreign direct investment and financial development and two unidirectional paths: one from electricity consumption to foreign direct investment and from financial development to electricity consumption. In addition, we observe negative and significant responses of financial development to shocks in electricity consumption. Our results can have a double interpretation. First, they provide an overview of the interactions between the variables studied, whose evolution may be prognosticated with the analysis of shocks resulting from the methodology adopted in our paper. This is serviceable given the recurrent turbulence in the international financial markets and the incessant perturbations in the prices of energy commodities, visually examined especially in recent years. Second, our empirical findings are useful for policymakers willing to have earlier diagnoses for policies strengthening renewable energy use in these countries. Our results can be seen on the side of this objective. The quite developed financial system in these countries may play, indeed, an important role in encouraging the FDI installation in the field of renewable energy.
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海湾合作委员会国家金融发展、电力消费和外国直接投资之间的相互作用:来自GMM面板VAR的新见解
在过去的几年里,海湾合作国家(GCC)国家的经济受到油价大幅下跌的影响,这些国家拥有世界上大部分的石油和天然气出口。这给他们的政策制定者施加了压力,要求他们减轻对自然资源的严重依赖,并使出口多样化。与此同时,由于气候条件恶劣,海湾合作委员会国家的用电量很高。这促使他们的政策制定者考虑不可避免地转向环保的发电资源。在这些国家的金融制度的推动下,外国直接投资可以在实现上述目标方面发挥重要作用。因此,本文的目的是利用一种新颖的GMM-Panel VAR方法来研究海湾合作委员会国家的外国直接投资、电力消费和金融发展之间的关系。数据观测时间为1990年至2019年。我们发现外商直接投资与金融发展之间存在双向因果关系,并有两条单向路径:一条是从电力消费到外商直接投资,一条是从金融发展到电力消费。此外,我们观察到金融发展对电力消费冲击的负面和显著反应。我们的结果可以有双重解释。首先,它们概述了所研究变量之间的相互作用,这些变量的演变可以通过分析我们论文中采用的方法产生的冲击来预测。鉴于国际金融市场的反复动荡和能源商品价格的不断动荡,特别是近年来的目测情况,这是可行的。其次,我们的实证研究结果有助于决策者更早地诊断这些国家加强可再生能源使用的政策。我们的结果可以从这个目标的侧面看出来。事实上,这些国家相当发达的金融制度可能在鼓励外国直接投资在可再生能源领域的安装方面发挥重要作用。
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来源期刊
CiteScore
6.80
自引率
12.80%
发文量
42
审稿时长
6-12 weeks
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