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Financial development and energy security risk: Do human capital and institutional quality make a difference?

Year: 2025

Type: article

Abstract: This study investigates the impact of financial development (FD) on energy security risk (ESR) in 48 Belt and Road Initiative (BRI) countries from 1948 to 2022, emphasizing the roles of human capital (HC) and institutional quality (IQ). Findings reveal that FD significantly influences ESR, with IQ and HC serving as critical pathways. FD negatively affects ESR through HC, highlighting human capital's importance in enhancing energy security. Additionally, IQ mediates the relationship between FD and ESR, showing FD's adverse effect on ESR as IQ improves. The analysis also identifies GDP and trade openness as key factors, with GDP reducing and trade openness increasing ESR. These results highlight the need for BRI policymakers to consider FD's dual effects while enhancing IQ and HC to ensure effective energy security policies. Leveraging FD can help mitigate ESR and promote sustainable economic and environmental outcomes among participating BRI countries.

Source: Borsa Istanbul Review

DOI: 10.1016/j.bir.2025.03.007

Authors: Aiman Javed, Li Yong, Junaid Ashraf

Institutions: University of Science and Technology of China, Jiangxi University of Water Resources and Electric Power, Nanchang Institute of Technology

Language: English

Topic: Global Energy Security and Policy

Subfield: General Energy

Field: Energy

Domain: Physical Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth, Partnerships for the goals

Open Access status: gold

Estimated APC paid: $1,500