The Influence of Financial Development on Renewable Energy Consumption: A Nonlinear Analysis from a Global Perspective

Financial development is widely regarded as an important factor influencing renewable energy consumption. Nevertheless, empirical studies conducted by various scholars have revealed that the effect of financial development on renewable energy consumption remains controversial. Based on this backdrop, this paper endeavors to analyze the nonlinear influence of financial development on renewable energy consumption from the perspective of moderating effects. First of all, this paper theoretically analyzes the potential moderating effects of financial development itself, urbanization, and environmental regulation on the impact of financial development on renewable energy consumption. Subsequently, leveraging the Panel Smooth Transition Regression (PSTR) model and the global panel data of 143 countries from 1996 to 2020, the empirical tests are conducted to verify these moderating effects. The results indicate that the variations in moderating variables can lead to disparities in the influence of financial development on renewable energy consumption. Specifically, with the increase in financial development level, urbanization rate, and environmental regulation intensity, the promoting effect of financial development on renewable energy consumption gradually strengthens. Finally, based on the aforementioned research findings, this paper proposes corresponding policy recommendations from the perspectives of these moderating factors.