The Effect of Financial Development on EnergConsumption: Evidence from Russia

Abstract

This paper explores the effect of financial development, economic growth, and energy prices represented by consumer price index (CPI) on energconsumption in Russia by performing VECM, CCR, DOLS and FMOLS analyses to the annual data from 1995 to 2019. The findings of this empiricaanalysis reveal that financial development and economic growth have positive impact on energy consumption in Russia. Furthermore, the effect oenergy prices expressed by CPI is revealed to be negative, which is consistent with the theory and expectations in practice. Based on the findings of thistudy, the nexus and impacts of financial development on energy consumption are discussed, as well as plausible explanations and policy implication.