Financial Development, Green Marketing Awareness and Energy Performance: Evidence from the EU-27

Abstract

This study investigates the long- and short-run determinants of energy intensity in the EU-27 by integrating financial development and green marketing awareness into an ARDL–ECM framework. Unlike prior research that examines financial or environmental factors separately, this study offers the first macro-level evidence on how behavioral environmental awareness interacts with financial development to shape energy performance. The results show a stable long-run cointegration relationship. Financial development and green marketing awareness exert positive and persistent effects on energy intensity, and their interaction amplifies this upward pressure. These findings suggest that neither financial deepening nor strengthened environmental communication has yet produced aggregate efficiency gains. In contrast, income growth reduces energy intensity, while industrial activity and urbanisation increase it. Short-run dynamics are weak, reflecting slow adjustment and the inertia of annual energy patterns. The study contributes by demonstrating that green marketing awareness—despite its growing role in EU sustainability discourse—does not automatically translate into lower energy use. This highlights the need for coordinated policies aligning financial incentives, credible environmental communication and structural reforms. Overall, the analysis offers a novel behavioural–financial perspective on energy intensity and provides an empirical basis for designing more effective strategies to support the EU’s long-term decarbonisation goals.