The Effect of Stock Market and Banking Sector Developments on Energy Consumption in BRICS

Abstract

Energy is an important resource in the economic development of countries. While it is used asan input in production, it also has an important usage area in consumption. For these reasons,the factors affecting energy use have been the subject of many studies. This study examines theimpact of financial development (FD) on energy consumption (EC) in BRICS countries (Brazil,Russia, India, China, and South Africa). In the study, EC, FD, economic growth, foreign direct investmentsand total trade (%GDP) variables for the period 1994–2017 were examined with thehelp of the PVAR (panel vector autoregressive) model. According to the findings, there is a unidirectionalrelationship from both EC and economic growth to the development of the bankingsector.