Financial development, technological innovation and energy security: Evidence from Chinese provincial experience

Rapid growth in the demand for global energy has raised concerns about energy security and climate change. Based on statistical data of 30 provinces in China from 2000 to 2018, this paper takes energy security as the focus, adopting a fixed effect model, random effect model, instrumental variable estimation, and panel threshold model to systematically verify the influence of the relationship between financial development, technological innovation, and their interaction term on energy security. Through a series of empirical analyses, endogeneity tests, and robustness tests, the findings suggest that China's energy security is enhanced by financial development and technological innovation. Specifically, financial development can improve energy security through technological innovation. At the same time, there is a nonlinear threshold effect between financial development and energy security due to differences in technological innovation between regions. Further heterogeneity analysis shows that the constraint of technological innovation is significantly supported in coastal regions and regions with low capital stock. The empirical results of this paper provide policy recommendations and empirical insights for China's energy security.