How does financial inclusion promote low-carbon energy transition? The global case for natural gas

Financial inclusion has been a focus since it was first proposed by the United Nations, and its impact on natural gas consumption has remained unsettled in the extant literature. Based on a balanced panel dataset of 73 countries over the period 2004–2017, this study investigates the nexus between financial inclusion and natural gas consumption from a global perspective. For this purpose, we employ a series of methods that include static panel estimations (i.e., the FE and RE) and dynamic panel estimations (i.e., the SYS-GMM and D-GMM). Considering that natural gas consumption varies across different countries, we conduct an asymmetry analysis in the financial inclusion–natural gas nexus. Furthermore, to detect the potential impact mechanism between the two core variables, we analyze the roles of economic growth and energy efficiency in the nexus between financial inclusion and natural gas consumption. The estimation results indicate that financial inclusion can significantly promote natural gas consumption. However, this effect is asymmetric across countries at different stages of the transition toward low-carbon energy. Moreover, this study verifies the mediating effects of economic growth and energy efficiency. Based on the main findings, we provide several policy recommendations to expedite the transition to low-carbon energy and the expansion of financial inclusion.