Can Financial Development Promote Renewable Energy Transition? An Empirical Research Based on Global Panel Data

Faced with increasingly severe global environmental and energy challenges, promoting the transition to renewable energy is of paramount importance. Based on the panel data of 167 countries spanning the period from 2000 to 2020 and employing the dynamic panel model, this paper empirically investigates the impact of financial development on renewable energy transition. The results indicate that from a global perspective, overall financial development does not exert significant influence on renewable energy transition. Among the sub-indicators of financial development, only the depth of the financial institution shows a significantly positive effect at the 10% level, while the others are not statistically significant. Sub-sample regression analysis reveals that, for countries with lower development levels, financial development has a significantly negative impact on renewable energy transition, whereas for countries with higher development levels, the impact is not significant. This indicates notable country-specific differences in the influence of financial development on renewable energy transition. It is recommended that countries formulate differentiated financial support policies tailored to their respective development stages to promote the transition to renewable energy.