This paper examines the influence of globalization on energy consumption by employing a panel error correction model with cross-sectional dependence. The empirical results uncover an inverted U-shaped relationship between globalization and energy consumption in the long run, i.e., energy consumption will increase before a certain threshold of globalization arrives then it begins to reduce. Furthermore, there exists nonlinear threshold effect of financial development on this inverted U-shaped relationship. The findings therefore suggest that policy makers should pay more attention on enhancement of globalization when engaging substantial energy consumption control strategy and put formidable emphasis on the roles of financial development.
Energy Vol 213
Zhilin Huang, Hong Zhang, Hongbo Duan