How does the Development of the Financial Industry Advance Renewable Energy? A Panel Regression Study of 198 Countries over three Decades

The purpose of this paper is to analyze whether and how the financial industry might have an impact on the development of renewable energy. In order to answer this question, the influence of several indicators of financial sector development will be estimated. To this extent, we rely on an unbalanced panel of 198 countries over the period 1980-2008. Our dataset includes financial industry indicators, measures of renewable energy development and several variables that control for other important factors related to renewable energy development, like economic, energy and policy indicators. We employ panel data techniques to investigate the impact of financial development on renewable energy development. The remainder of this paper is organized as follows: Section 2 gives a brief overview of the literature on renewable energy and provides a background for our analysis. Section 3 introduces the methodology and the data. The results are presented and discussed in section 4. Section 5 concludes the analysis.