TY  - JOUR
AU  - Jean-Claude, Bimenyimana
AU  - Dong, Meisheng
PY  - 2026
DA  - 2026/06/04
TI  - Stock Market Development and CO<sub>2</sub> Emissions in Africa: The Moderating Role of Domestic Credit to the Private Sector
JO  - Advances in Environmental and Engineering Research
SP  - 012
VL  - 07
IS  - 02
AB  - This study examines the effects of stock market development (SMC) and renewable energy consumption on CO2 emissions in nine African economies over the period 2000-2024. It also tests whether domestic credit to the private sector (DC) moderates the relationship between stock market development and CO2 emissions. Panel data econometrics, including Feasible Generalized Least Squares (FGLS) for the main estimates and Panel-Corrected Standard Errors (PCSE) for robustness checks, are used as the primary analytic technique in this study. The results of this study suggest that a one percent increase in SMC results in about a 0.09‐0.14 percent increase in CO2 emissions; conversely, DC contributes an additional amount of CO2 emissions of about 0.20‐0.34 percent. On the other hand, a one percent increase in renewable energy consumption reduces CO2 emissions by about 0.44 to 0.54 percent. The research also found a statistically significant positive interaction term, indicating that greater credit market depth contributes to higher-carbon outputs driven by stock market activity. To support the sustainable economy, African governments should incentivize the development of “green finance” instruments such as green bonds, sustainability-linked equity instruments, and require that investors include climate risk assessments in their lending portfolios. In addition, governments should require that publicly traded corporations disclose information related to their climate-related vulnerabilities and should provide market-wide incentives such as carbon pricing, tax credits for companies that implement green initiatives, and subsidized lending to companies that invest in low-carbon initiatives. Overall, the findings of this study indicate that the financial sector is and will continue to influence the ability of African economies to effectively transition to and utilize renewable energy sources, while also impacting the formulation of their energy policies and how they will achieve their respective decarbonization strategies.
SN  - 2766-6190
UR  - https://doi.org/10.21926/aeer.2602012
DO  - 10.21926/aeer.2602012
ID  - Jean-Claude2026
ER  -