Understanding the Relationship between Electric Power Consumption, Technological Transfer, Financial development and Environmental Quality.

This research paper attempts to investigate both the long-run and causality relationship among electric power consumption (EPC), technological transfer, financial development (FD), and environmental quality for the Saudi Arabia (KSA) economy from 1980 to 2019. In doing so, we propose a carbon emission function tested by incorporating multi-steps techniques such as autoregressive distributed lag (ARDL) has been exploited to determine the existence of cointegration or no; while vector error correction model (VECM) has been applied to decide the direction of causality. In this paper we have proposed two proxies of technological transfer, namely imported technology (MT) and Technical cooperation grants (TCG). The results indicate the existence of cointegration between the concerned series. Besides, the existence of a feed-back effect among variables (except TCG) in the long-run. However, in the short run feed-back effect exists among EPC and EnvQ; MT and EnvQ; EPC and MT. Thus, the paper provides original visions for policy makers to encourage the technological transfer by financing and supporting the electric energy sector which constitutes the main locomotive to improve the environment quality for the KSA.JEL classification : C32, C52, O11, Q43