Impact of equity market development on renewable energy consumption: Do the role of FDI, trade openness and economic growth matter in Asian economies?

Using the panel dataset of 16 Asian economies for the period 1990 to 2019, we examine the impact of equity market development on the consumption of renewable energy by endogenizing foreign direct investment (FDI), trade openness and economic growth. The novel techniques of panel quantile regression (PQR) developed by Canay (2011), Powell (2015 and 2016) and Machado and Silva (2018) are employed to obtain robust findings for the equity market-renewable energy nexus. Interestingly, our numerical outcomes explain the insignificant impact of equity markets on renewable energy consumption in Asian region. The findings further describe that expansion in trade activities and enhancement in economic growth can significantly reduce the consumption of energy through technical effect. In addition, PQR results reveal that equity market development encourages renewable energy projects at high (0.70) quantile group of countries where equity markets are relatively more developed. FDI encourages the consumption of renewable energy through the promotion of investment activities at lower group of Asian countries where capital is relatively scarce. Given these evidences, our research offers significant value to empirical literature and also provides important suggestions for policy formulations.