scholarly journals Financial Development and Energy Consumption Nexus in Malaysia: A Multivariate Time Series Analysis

2019 ◽  
Author(s):  
Faridul Islam ◽  
Muhammad Shahbaz ◽  
Ashraf U. Ahmed ◽  
Md. Mahmudul Alam
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
Multivariate Time Series ◽  
Policy Implications ◽  
Energy Relation ◽  
Emerging Nations ◽  
Distributed Lag ◽  
Long Run ◽  
Growing Economy

Despite a bourgeoning literature on the existence of a long-run relationship between energy consumption and economic growth, the findings have failed to establish clearly the direction of causation. A growing economy needs more energy, which is exacerbated by growing population. Evidence suggests that financial development can reduce overall energy consumption by achieving energy efficiency. Economic growth and energy consumption in Malaysia have been rising in tandem over the past several years. The three public policy objectives of Malaysia are: economic progress, population growth and financial development. It is of interest to the policymakers to understand the dynamic interrelation among the stated objectives. The paper implements Auto Regressive Distributed Lag (ARDL) approach to cointegration to examine the existence of a long-run relationship among the series: energy consumption, population, aggregate production, and financial development for Malaysia; and tests for Granger causality within the Vector Error Correction Model (VECM). The results suggest that energy consumption is influenced by economic growth and financial development, both in the short and the long-run, but the population-energy relation holds only in the long run. The findings have important policy implications for balancing economic growth vis-à-vis energy consumption for Malaysia, as well as other emerging nations.

scholarly journals The Impact of Industrialization, Trade Openness, Financial Development, and Energy Consumption on Economic Growth in Indonesia

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 174
Author(s):  
Khalid Eltayeb Elfaki ◽  
Rossanto Dwi Handoyo ◽  
Kabiru Hannafi Ibrahim
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Least Squares ◽  
Financial Development ◽  
Correction Term ◽  
Trade Openness ◽  
Ordinary Least Squares ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact

This study aimed to scrutinize the impact of financial development, energy consumption, industrialization, and trade openness on economic growth in Indonesia over the period 1984–2018. To do so, the study employed the autoregressive distributed lag (ARDL) model to estimate the long-run and short-run nexus among the variables. Furthermore, fully modified ordinary least squares (FMOLS), dynamic least squares (DOLS), and canonical cointegrating regression (CCR) were used for a more robust examination of the empirical findings. The result of cointegration confirms the presence of cointegration among the variables. Findings from the ARDL indicate that industrialization, energy consumption, and financial development (measured by domestic credit) positively influence economic growth in the long run. However, financial development (measured by money supply) and trade openness demonstrate a negative effect on economic growth. The positive nexus among industrialization, financial development, energy consumption, and economic growth explains that these variables were stimulating growth in Indonesia. The error correction term indicates a 68% annual adjustment from any deviation in the previous period’s long-run equilibrium economic growth. These findings provide a strong testimony that industrialization and financial development are key to sustained long-run economic growth in Indonesia.

scholarly journals Petroleum Consumption and Financial Development in Malaysia

2016 ◽  
Author(s):  
Jen-Eem Chen ◽  
Yan-Ling Tan ◽  
Chin-Yu Lee ◽  
Lim-Thye Goh
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Financial Sector ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run

This paper aims to contribute to the existing literature by examining the dynamic relationship among petroleum consumption, financial development, economic growth and energy price. The sample of this study is based on the Malaysian annual data from 1980 to 2010. The model specification was examined in the Autoregressive Distributed Lag (ARDL) framework and the results revealed the existence of a long-run equilibrium. The findings indicated that financial development and economic growth cause a demand for energy to escalate in the long run. The Toda-Yamamoto (TYDL) non Granger-causality test provides evidence that there is unidirectional Granger-causality running from financial development and economic growth to energy consumption in the long run. This suggests that Malaysia is not an energy-dependent country. Hence, the government could implement energy conservation policies to reduce the waste of energy use. Given that development in the financial sector, and economic growth increase petroleum consumption in Malaysia, the policies pertaining to energy consumption should incorporate the development of the financial sector and economic growth of country.   Keywords: Petroleum consumption, financial development, non-renewable energy, Autoregressive Distributed Lag (ARDL), Toda-Yamamoto (TYDL) non Granger-causality test

Economic Growth, Energy Consumption and Carbon Emissions in China: A Cointegration Analysis

2013 ◽  
Vol 291-294 ◽  
pp. 1616-1619 ◽  
Author(s):  
Qun Wei Wang ◽  
Cheng Ling Cai ◽  
Dan Lu
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emissions ◽  
Carbon Dioxide Emissions ◽  
Cointegration Analysis ◽  
Policy Implications ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Growth Energy

This paper studies the relationships between economic growth, energy consumption and carbon dioxide emissions using an autoregressive distributed lag (ARDL) procedure and Engle-Granger causality test in China over the period 1965-2011. The empirical results show that GDP, energy and carbon emissions have appeared to be cointegrated. Moreover, there exists unidirectional causality from energy consumption to economic growth and carbon emissions to economic growth in short run. It has also been found that energy consumption and carbon emissions promote economic growth in long run. Some policy implications have been proposed finally.

scholarly journals Nexus Between Financial Development, FDI, Globalization, Energy Consumption and Environment: Evidence From BRI Countries

2021 ◽  
Vol 9 ◽  
Author(s):  
Jie Lu ◽  
Muhammad Imran ◽  
Abdul Haseeb ◽  
Shah Saud ◽  
Mengyun Wu ◽  
...  
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Energy Consumption ◽  
Financial Development ◽  
Direct Investment ◽  
Policy Implications ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
Belt And Road

This study explores the nexus between foreign direct investment, financial development, energy consumption, economic growth and globalization for a selected panel of Belt and Road Initiative (BRI) countries over the period 1990–2016. After employing appropriate panel unit root tests, the Westerlund co-integration test, the DSUR long-run panel estimation approach and the Dumitrescu-Hurlin panel causality test, the results reveal a significant long-run relationship among the analyzed variables. The DSUR results show that energy consumption is boosted by 0.023 and 0.790% when a 1% rise occurs in foreign direct investment and economic growth. A 1% increase in financial development and globalization reduces energy consumption by 0.049 and 0.621%, respectively. We also found bidirectional relationships of energy consumption with financial development and foreign direct investment with globalization for the selected sample of our study. A unidirectional causal relationship exists, moving from energy consumption towards both financial development and foreign direct investment. An increase in FDI, the introduction of energy-efficient technology, and development of the financial sector lead to sustainable economic growth. The findings reveal the need to formulate policies that promote energy efficiency among Belt and Road (BR) countries. The policy implications of this study are presented in the Conclusion.

Fish Exports and Economic Growth: The Pakistan’s Experience

2019 ◽  
Vol 20 (2) ◽  
pp. 279-296 ◽  
Author(s):  
Syed Tehseen Jawaid ◽  
Mohammad Haris Siddiqui ◽  
Zeeshan Atiq ◽  
Usman Azhar
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Positive Impact ◽  
Impulse Response Function ◽  
Policy Implications ◽  
Sensitivity Analyses ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

This study attempts to explore first time ever the relationship between fish exports and economic growth of Pakistan by employing annual time series data for the period 1974–2013. Autoregressive distributed lag and Johansen and Juselius cointegration results confirm the existence of a positive long-run relationship among the variables. Further, the error correction model reveals that no immediate or short-run relationship exists between fish exports and economic growth. Different sensitivity analyses indicate that initial results are robust. Rolling window analysis has been applied to identify the yearly behaviour of fish exports, and it remains negative from 1979 to 1982, 1984 to 1988, 1993 to 1999, 2004 and from 2010 to 2013, and it shows positive impact from 1989 to 1992, 2000 to 2003 and from 2005 to 2009. Furthermore, the variance decomposition method and impulse response function suggest the bidirectional causal relationship between fish exports and economic growth. The findings are beneficial for policymakers in the area of export planning. This study also provides some policy implications in the final section.

The relationship between financial development and economic growth in Eswatini (formerly Swaziland)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Siphe-okuhle Fakudze ◽  
Asrat Tsegaye ◽  
Kin Sibanda
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Causality Test ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Relationship

PurposeThe paper examined the relationship between financial development and economic growth for the period 1996 to 2018 in Eswatini.Design/methodology/approachThe Autoregressive Distributed Lag bounds test (ARDL) was employed to determine the long-run and short-run dynamics of the link between the variables of interest. The Granger causality test was also performed to establish the direction of causality between financial development and economic growth.FindingsThe ARDL results revealed that there is a long-run relationship between financial development and economic growth. The Granger causality test revealed bidirectional causality between money supply and economic growth, and unidirectional causality running from economic growth to financial development. The results highlight that economic growth exerts a positive and significant influence on financial development, validating the demand following hypothesis in Eswatini.Practical implicationsPolicymakers should formulate policies that aims to engineer more economic growth. The policies should strike a balance between deploying funds necessary to stimulate investment and enhancing productivity in order to enliven economic growth in Eswatini.Originality/valueThe study investigates the finance-growth linkage using time series analysis. It determines the long-run and short-run dynamics of this relationship and examines the Granger causality outcomes.

scholarly journals CO2 Emissions, Energy Consumption, and Economic Growth: New Evidence in the ASEAN Countries

2019 ◽  
Vol 12 (3) ◽  
pp. 145 ◽  
Author(s):  
Vo ◽  
Vo ◽  
Le
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Granger Causality ◽  
Co2 Emissions ◽  
Causal Effect ◽  
The Philippines ◽  
Policy Implications ◽  
Renewable Energy Consumption ◽  
Long Run

The members of the Association of Southeast Asian Nations (ASEAN) have made several attempts to adopt renewable energy targets given the economic, energy-related, environmental challenges faced by the governments, policy makers, and stakeholders. However, previous studies have focused limited attention on the role of renewable energy when testing the dynamic link between CO2 emissions, energy consumption and renewable energy consumption. As such, this study is conducted to test a common hypothesis regarding a long-run environmental Kuznets curve (EKC). The paper also investigates the causal link between carbon dioxide (CO2) emissions, energy consumption, renewable energy, population growth, and economic growth for countries in the region. Using various time-series econometrics approaches, our analysis covers five ASEAN members (including Indonesia, Myanmar, Malaysia, the Philippines, and Thailand) for the 1971–2014 period where required data are available. Our results reveal no long-run relationship among the variables of interest in the Philippines and Thailand, but a relationship does exist in Indonesia, Myanmar, and Malaysia. The EKC hypothesis is observed in Myanmar but not in Indonesia and Malaysia. Also, Granger causality among these important variables varies considerably across the selected countries. No Granger causality among carbon emissions, energy consumption, and renewable energy consumption is reported in Malaysia, the Philippines, and Thailand. Indonesia experiences a unidirectional causal effect from economic growth to renewable energy consumption in both short and long run and from economic growth to CO2 emissions and energy consumption. Interestingly, only Myanmar has a unidirectional effect from GDP growth, energy consumption, and population to the adoption of renewable energy. Policy implications have emerged based on the findings achieved from this study for each country in the ASEAN region.

scholarly journals The Financial Development-Renewable Energy Consumption Nexus in the Case of Azerbaijan

Energies ◽  
2020 ◽  
Vol 13 (23) ◽  
pp. 6265
Author(s):  
Shahriyar Mukhtarov ◽  
Sugra Humbatova ◽  
Natig Gadim-Oglu Hajiyev ◽  
Sannur Aliyev
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Financial Development ◽  
Time Series Data ◽  
Policy Implications ◽  
Small Samples ◽  
Series Data ◽  
Energy Prices ◽  
Renewable Energy Consumption

This article analyzed the relationship between financial development, renewable energy consumption, economic growth, and energy prices in Azerbaijan by employing time series data for the time span of 1993–2015. The autoregressive distributed lagged (ARDL) technique was applied in empirical estimations, because it performs better than all the alternative techniques in small samples, which was the case here in this article. The results of estimation found that there is a positive and statistically significant influence of financial development and economic growth on renewable energy consumption, whereas the prices of energy proxied by CPI have an adverse impact on renewable energy consumption in Azerbaijan. Also, estimation results demonstrated that a 1% rise in financial development, proxied by domestic credit as a percentage of GDP, and economic growth increase renewable energy consumption by 0.16% and 0.60%, respectively. The different financial development impacts on renewable energy consumption and related policy implications were also introduced.

The impact of financial development, economic growth and energy consumption on environmental degradation

2015 ◽  
Vol 26 (5) ◽  
pp. 666-682 ◽  
Author(s):  
Madhu Sehrawat ◽  
A K Giri ◽  
Geetilaxmi Mohapatra
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
Environmental Degradation ◽  
Series Data ◽  
Development Economic ◽  
Content Type ◽  
Indian Economy ◽  
Long Run ◽  
The Impact

Purpose – The purpose of this paper is to investigate the impact of financial development, economic growth and energy consumption on environment degradation for Indian economy by using the time series data for the period 1971-2011. Design/methodology/approach – The stationary properties of the variables are checked by ADF, DF-GLS, PP and Ng-Perron unit root tests. The long-run relationship is examined by implementing the Autoregressive Distributed Lag bounds testing approach to co-integration and error correction method (ECM) is applied to examine the short-run dynamics. The direction of the causality is checked by VECM framework and variance decomposition is used to predict exogenous shocks of the variables. Findings – The empirical evidence confirms the existence of long-run relationship among the variables. Financial development appears to increase environmental degradation in India. The main contributors to environmental degradation are: economic growth, energy consumption financial development and urbanization. The results also lend support to the existence of environmental Kuznets curves for Indian economy. Research limitations/implications – The present study suggests that environmental degradation can be reduced at the cost of economic growth or energy efficient technologies should be encouraged to enhance the domestic product with the help of financial sector by improving environmental friendly technologies from advanced economies. Originality/value – This paper proposes to make a contribution to the existing literature through examining the relationship between financial development and environmental degradation in Indian economy during 1971-2011 by employing modern econometric techniques.

scholarly journals DOES FINANCIAL DEVELOPMENT HAMPER ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM BANGLADESH

2012 ◽  
Vol 14 (3) ◽  
pp. 558-582 ◽  
Author(s):  
Qazi Muhammad Adnan Hye ◽  
Faridul Islam
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Principal Component ◽  
Distributed Lag ◽  
Window Method ◽  
Long Run ◽  
Rolling Window ◽  
Augmented Dickey Fuller ◽  
The Stability ◽  
The Impact

The objective of this study is twofold. (a) Construct the first ever financial development index (FDI) for Bangladesh using the principal component method (PCM). (b) Use the FDI to explore the existence of a long run relationship between FDI and economic growth. The Augmented Dickey Fuller and the Ng-Perron unit root tests have been applied to examine the stationarity properties of the series. To explore a long run relation, the Autoregressive Distributed Lag (ARDL) approach to cointegration; and to assess the stability of the parameters, the rolling window regression approach have been used. The results show that the impact of real interest rate (RIR) and FDI on economic growth is negative. Estimates from rolling window method show that FDI and RIR are negatively related to economic growth for the years 1987–1988, 1992–1999, 2002–2006, 2008 and 2009; and 1986–1998, 2006 and 2007, respectively. The results may help policymakers formulate effective financial sector policies as a tool to promote economic growth in Bangladesh.

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