Abstract
This study explores the nonlinear relationship between remittances and energy poverty, particularly through the moderating roles of education, financial development, income inequality and economic performance in less and more advanced developing countries. By employing a dynamic panel ARDL approach with PMG, MG and DFE estimators, the research examines both long- and short-run effects using data from 20 developing countries. The key findings in the long run show that in less advanced developing countries, remittances improve energy access when the school enrolment threshold is below 15.15%, while in more advanced countries, this threshold is 88.73%. Remittances initially reduce energy poverty but worsen it once these thresholds are crossed. With financial development, the threshold for less advanced countries is 60.60%, meaning remittances help only after this level is achieved. In contrast, more advanced countries need a lower threshold of 25.52%. For income inequality, the study identifies thresholds of 44.30% and 51.75% for less and more advanced countries, respectively, indicating that remittances become ineffective in highly unequal societies. Lastly, economic performance thresholds are 15.49% for less advanced and 36.23% for more advanced countries, highlighting that economic performance enhances the positive effect of remittances on energy access. The study’s policy recommendations emphasise the importance of targeting remittance flows based on the developmental stage of countries. For less advanced economies, policies should focus on improving financial development and education systems, since these factors increase the effectiveness of remittances in reducing energy poverty. For more advanced economies, reducing income inequality is critical for optimising the use of remittances to enhance energy access. Additionally, fostering economic performance will ensure remittances contribute positively to energy poverty alleviation across all regions.