Financial Development, Clean Energy, and Human Capital: Roadmap towards Sustainable Growth in América Latina

Abstract

The consumption of renewable energy has become a substitute for fossil fuels to mitigate environmental degradation. However, this substitution of energy raises many questions regarding its possible impact on economic growth. In this context, this research aims to examine the long-term relationship between economic growth and financial development, non-renewable energy, renewable energy, and human capital in 16 Latin American countries. Panel data techniques during the period 1988–2018 and statistical information compiled by the World Bank and Penn Word Table databases were used. Second-generation econometric techniques (cross-sectionally augmented Dickey–Fuller (CADF) and cross-sectionally augmented IPS (CIPS) were used in the work methodology, which allow the presence of cross-sectional dependence between sections to be controlled. The main results indicate that there is a long-term equilibrium relationship between financial development, non-renewable energy consumption, renewable energy consumption, human capital, and economic growth. The results show that the consumption of renewable energy does not compromise economic growth; the 1% increase in renewable energy consumption is related to the 1% increase in economic growth. The policy implications suggest some measures to ensure economic growth considering the role of green energy and human capital.

Converting a resource curse into a resource blessing: The function of institutional quality with different dimensions

“…This also means a 1.09%-2.35% increase in real GDP per capita when human capital increase by a unit percent. The finding that human capital accumulation contributes to real GDP is also validated by Zallé (2019); Ponce et al (2021); Shittu et al (2021). On the contrary, financial development has negative relationship with real GDP per capita throughout the model, although it is only significant under pooled-OLS with coefficient of − 0.181 which means a reduction in real GDP per capita by 0.18% resulting from a cent increase in financial development.…”

“…As vital as financial development in avoiding the resource curse, human capital, which is defined as the knowledge and skills that people acquire, preserve, and use, plays a crucial role in reducing the danger of the curse or avoiding its negative impacts because many researchers think that low human capital accumulation is one of the main factors contributing to resource curse, particularly in developing nations with an abundance of natural resources. Since human capital development will promote economic growth, the risk of resource curse can be mitigated by making human capital investments, according to Balach and Law (2015); Zallé (2019); Nouira and Saafi (2021); Ponce et al, (2021); Abdouli and Omri (2021); Tiwari and Bharadwaj (2021); Sun and Wang, 2021. When the literature on the resource curse theory is examined, it is interesting to note that while many studies have looked at the connections between financial development and resource abundance or human capital and resource abundance, there are not sufficient studies looking at the connection between resource abundance and institutional quality. The degree of institutional quality is crucial for natural resource management, according to proponents of the institutional perspective of economic growth, because institutions determine factors like physical and human capital (Glawe and Wagner, 2020).…”

Technological Innovation and Circular Economy Practices: Business Strategies to Mitigate the Effects of COVID-19

“…allowed the processing of information for adequate decision-making in efficient resource use. It allowed for a reduction of waste or a reduction of costs and time, which contributed to CE adoption, which was reflected as savings for the firm and economic gain [101]. The authors of [65] reached similar findings, who affirmed that big data analysis contributes to an adequate definition of decisions for the efficient use of resources.…”

The future of industry 4.0 and the circular economy in Chinese supply chain: In the Era of post-COVID-19 pandemic

“…Likewise, the shortage of productive inputs due to the malfunction of the entire product supply chain has prompted firms to modify their production process to optimize resource use (Neumeyer et al 2020 ). Similarly, due to the decrease in world production, energy-saving practices have increased, especially the use of renewable energy has been promoted, which contributes to a cleaner production process (Wicker et al 2021 ; Wuyts et al 2020 ; Ponce et al 2021 ). P.1: COVID-19 has improved the eco-design of products.…”