Title: ANALYZING THE DYNAMIC RELATIONSHIPS BETWEEN FINANCIAL DEVELOPMENT, RENEWABLE ENERGY CONSUMPTION, AND ECONOMIC GROWTH: EVIDENCE FROM TANZANIA
Authors:
Mr. Massoud Rashid Ali and Dr. Mohammed Salim Ahmed
Abstract:
This paper analyzing the dynamic relationships between financial development, renewable energy consumption, and economic growth of Tanzania. Given the complex and multifaceted nature of these relationships, a robust econometric approach is employed to capture both short-term and long-term effects. The methodology is structured using data from World Bank indicators from (1990-2021) to assess how financial development facilitates renewable energy adoption, and in turn, how both financial development and renewable energy consumption influence economic growth.
Findings indicated that in the long run the net financial flow shows a significant negative relationship with economic growth since a 1% increase in net financial flow decreases the economic growth but the renewable energy consumption has a positive relationship with growth statistically significant positive relationship between renewable energy consumption and economic growth in the region. In case of short run shown that net financial flow increases economic growth however, renewable energy consumption is not significance and has a negative relationship with economic growth.
The study will contributes to existing literature and by prioritizing renewable energy investments, good financial system and supportive policies, Tanzania country can harness the economic potential of renewable energy while advancing environmental sustainability goals.
Keywords: Net Financial Flow, Renewable Energy Consumption and Economic Growth.
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