The effect of solar energy production on financial development and economic growth: Evidence from 11 selected countries


Altay Topcu B., Doğan M.

Energy Sources, Part B: Economics, Planning, and Policy, vol.1, no.17, pp.1-20, 2022 (SCI-Expanded)

Abstract

The aim of this study was to investigate the impact of solar energy production

on financial development and economic growth in 11 leading countries

in solar energy production over the period 2000–2019. The results of the

analysis indicated that solar energy production had a positive and significant

impact on financial development, however, not on economic growth. It was

found that the impacts of capital and direct investment variables on financial

development and economic growth were positive and significant. According

to Dumitrescu-Hurlin’s causality test results, a bidirectional causality relationship

was determined to exist between solar energy production and financial

development. Furthermore, a unidirectional causality relationship running

from economic growth to solar energy production was detected. In this

context, the analysis results confirmed the conservation hypothesis. The

results could be a guide on solar energy production policies. By considering

the impacts of solar energy production on financial development and economic

growth, more effective policy decisions could be made.