Improving energy efficiency is one of the most effective ways to deal with climate change and reduce carbon emissions in emerging economies. At the same time, financial development plays an essential role in promoting economic growth and affecting the environment. Therefore, this study examines the relationship between financial development, energy efficiency, control of corruption, and ecological footprint of the BRICS countries and the Next-11 economies from 1995 to 2014. The DEA method is used to estimate the energy efficiency of BRICS countries and N-11 economies. Also, the results of the system GMM model indicate that if corruption is controlled, financial development will improve energy efficiency. Also, if there are transparent systems in these economies, environmental quality can be improved by reducing the ecological footprint. The study also showed that corruption is more likely to increase energy efficiency and decrease the ecological footprint. At the same time, natural resource rents and technological innovations can improve energy efficiency and environmental quality. The result of causality emphasizes the feedback hypothesis between energy efficiency, ecological footprint, financial development, corruption control, natural resource rent, technological innovation, trade, and industrialization.

Energy Vol. 223

Xing Yao, Rizwana Yasmeen, Jamal Hussain, Wasi Ul Hassan Shah

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