The impacts of financial depth and foreign direct investment on the green and non-green energy consumption of OPEC members

This study aimed to investigate the impacts of financial depth and foreign direct investment (FDI) on green and non-green energy consumption in the panel data of 14 Organization of the Petroleum Exporting Countries (OPEC) members over the period of 1990–2015. To overcome endogeneity and heterogeneity issues and increase robustness, we applied the panel-corrected standard errors (PCSE) method and the instrumental variable approach with fixed effects (IV-FE). The findings indicate a significant positive relationship between FDI and CO2E and negative relationships between FDI and access to renewable electricity (ATE) and access to improved sanitation (AISANIT). Furthermore, the findings on financial depth indicated a significant negative relationship between FDI and CO2E and positive relationships between FDI and ATE and AISANIT. The main conclusions suggest that increases in FDI lead to decreases in green energy consumption and increases in non-green energy consumption, while increases in financial depth lead to the opposite scenario.