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Modeling natural gas consumption, capital formation, globalization, CO2 emissions and economic growth nexus in Malaysia: Fresh evidence from combined cointegration and causality analysis.
- Source :
- Energy Strategy Reviews; Sep2020, Vol. 31, pN.PAG-N.PAG, 1p
- Publication Year :
- 2020
-
Abstract
- The discovery of natural gas in the 20th century has increased aggregate energy consumption while spurring economic development. However, very little attention has been given in the energy economics literature, especially in Malaysia. As such, this paper primarily revisited the natural gas — economic growth nexus hypothesis in the case of Malaysia. The study was conducted with data from 1980 to 2014 in a multivariate framework with the inclusion of capital formation, globalization, and CO 2 emissions to avoid omitted variable bias. We investigated the stationarity properties with a method that accommodates a single structural break. Subsequently, the novel combined co-integration test in conjunction with several techniques were used to assess the magnitude of the long-run equilibrium relationship. The empirical findings trace the long-run equilibrium relationship among the variables over the sampled period. The Granger causality test analysis confirmed the growth-energy driven hypothesis in Malaysia. The findings call for the adoption of cleaner and environmentally friendly energy sources in the Malaysian energy mix. We highlight the need for pragmatic strides from both private and public energy sector stakeholders to prioritize clean and accessible energy in line with the Sustainable Development Goals. • We assess Malaysia's growth-induce natural gas energy nexus in a multivariate framework. • We utilize novel and reliable combined cointegration and causality analysis in the study. • Feedback causality is observed between gross capital and natural gas energy consumption. • An increase in gross capital formation by 1% increases RGDP by 0.09% — leading to an expansion in the economy. • We find trade-off between environmental quality and economic development in Malaysia. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 2211467X
- Volume :
- 31
- Database :
- Complementary Index
- Journal :
- Energy Strategy Reviews
- Publication Type :
- Academic Journal
- Accession number :
- 145714540
- Full Text :
- https://doi.org/10.1016/j.esr.2020.100526