Research Information System
Energy Strategy Reviews, vol.52, 2024 (SCI-Expanded)
The hydroelectric power sector has significant standing in the global energy mix, and its intersection with financial development and economic progression has substantial implications for realizing sustainable development. To this end, this study aims to unravel the relationship among hydroelectric power generation, financial development and economic growth in the world's largest 10 hydroelectric energy generating countries for the period 1990–2020. The study uses an econometric battery comprising the Westerlund-Edgerton LM bootstrap, the Augmented Mean Group (AMG), panel-corrected standard errors (PCSE) and the Dumitrescu-Hurlin panel causality approaches. The AMG estimations, following confirmation of cointegration among variables, reveal that hydroelectric energy generation has significant positive effect on economic growth and financial development. Besides, a bilateral causality has been observed between hydroelectric power generation, economic growth, and financial development. The empirical estimations validate the feedback hypothesis within the context of selected countries. The study's findings provide policymakers with crucial insights to encourage both hydropower generation and consumption and improve financial markets' depth and accessibility to fuel sustainable and inclusive economic growth across the hydropower belt.