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

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 a...

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Bibliographic Details
Main Authors: Aiman Javed, Li Yong, Junaid Ashraf
Format: Article
Language:English
Published: Elsevier 2025-07-01
Series:Borsa Istanbul Review
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Online Access:http://www.sciencedirect.com/science/article/pii/S2214845025000523
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Summary: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.
ISSN:2214-8450