IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2019-01-34.html
   My bibliography  Save this article

The Impact of Renewable Energy on Economic Well-Being of Malaysia: Fresh Evidence from Auto Regressive Distributed Lag Bound Testing Approach

Author

Listed:
  • Muhammad Haseeb

    (Taylor s Business School, Taylors University Lakeside Campus, 1 Jalan Taylors, 47500 Subang Jaya Selangor Malaysia,)

  • Irwan Shah Zainal Abidin

    (Asian Research Institute of Banking and Finance, University Utara Malaysia, Sintok 06010 Kedah Malaysia,)

  • Qazi Muhammad Adnan Hye

    (Mohammed Ali Jinnah University Karachi, Pakistan,)

  • Nira Hariyatie Hartani

    (School of Government, College of Law, Government and International Studies, Universiti Utara Malaysia, Sintok 06010 Kedah, Malaysia)

Abstract

This present study examines the role of renewable energy in influencing economic well-being in Malaysia. We used annual data over the period of 1980 to 2016 in order to apply recent econometrics. The study used renewable energy and economic growth as a proxy of economic well-being to examine the long run connection between renewable energy and economic well-being. The results of ARDL bound testing approach confirm the valid long-term connection among renewable energy and economic well-being in Malaysia. Furthermore, the results indicate that renewable energy have significant and positive impact on economic well-being in short and long run. It is therefore recommended that the policymakers are required to focus on the green energy generation sector by increasing renewable energy production from the existing sources.

Suggested Citation

  • Muhammad Haseeb & Irwan Shah Zainal Abidin & Qazi Muhammad Adnan Hye & Nira Hariyatie Hartani, 2019. "The Impact of Renewable Energy on Economic Well-Being of Malaysia: Fresh Evidence from Auto Regressive Distributed Lag Bound Testing Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 269-275.
    • Handle: RePEc:eco:journ2:2019-01-34
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/7229/4119
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/7229/4119
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pesaran, M. Hashem & Shin, Yongcheol & Smith, Richard J., 2000. "Structural analysis of vector error correction models with exogenous I(1) variables," Journal of Econometrics, Elsevier, vol. 97(2), pages 293-343, August.
    2. Mohammad Vafaeirad & Mohsen Mohammadiha & Yazdan Goodarzy, 2015. "Energy Consumption and GDP in Selected Asian Countries: A Cointegrated Panel Analysis," Journal of Asian Scientific Research, Asian Economic and Social Society, vol. 5(4), pages 177-184.
    3. Shahbaz, Muhammad & Loganathan, Nanthakumar & Zeshan, Mohammad & Zaman, Khalid, 2015. "Does renewable energy consumption add in economic growth? An application of auto-regressive distributed lag model in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 576-585.
    4. Anowor, Oluchukwu F. & Achukwu, Innocent I. & Ezekwem, Ogochukwu S., 2014. "Sustainable Sources of Energy and the Expected Benefits to Nigerian Economy," International Journal of Sustainable Energy and Environmental Research, Conscientia Beam, vol. 3(2), pages 110-120.
    5. Troster, Victor & Shahbaz, Muhammad & Uddin, Gazi Salah, 2018. "Renewable energy, oil prices, and economic activity: A Granger-causality in quantiles analysis," Energy Economics, Elsevier, vol. 70(C), pages 440-452.
    6. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    7. Mohammad Vafaeirad & Mohsen Mohammadiha & Yazdan Goodarzy, 2015. "Energy Consumption and GDP in Selected Asian Countries: A Cointegrated Panel Analysis," Journal of Asian Scientific Research, Asian Economic and Social Society, vol. 5(4), pages 177-184, April.
    8. Kardooni, Roozbeh & Yusoff, Sumiani Binti & Kari, Fatimah Binti, 2016. "Renewable energy technology acceptance in Peninsular Malaysia," Energy Policy, Elsevier, vol. 88(C), pages 1-10.
    9. Tayfur BAYAT & Sebnem TAS & Izzet TASAR, 2017. "Energy Consumption is a Determinant of Economic Growth in BRICS Countries or Not?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(8), pages 823-835.
    10. Christopher N. Ekong & Usenobong F. Akpan, 2014. "On Energy Subsidy Reform and Sustainable Development in Nigeria," International Journal of Management and Sustainability, Conscientia Beam, vol. 3(4), pages 186-202.
    11. Jaganath Behera, 2015. "Examined the Energy-Led Growth Hypothesis in India: Evidence from Time Series Analysis," Energy Economics Letters, Asian Economic and Social Society, vol. 2(4), pages 46-65.
    12. Lehr, Ulrike & Nitsch, Joachim & Kratzat, Marlene & Lutz, Christian & Edler, Dietmar, 2008. "Renewable energy and employment in Germany," Energy Policy, Elsevier, vol. 36(1), pages 108-117, January.
    13. Ong, H.C. & Mahlia, T.M.I. & Masjuki, H.H., 2011. "A review on energy scenario and sustainable energy in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(1), pages 639-647, January.
    14. Pesaran, H. Hashem & Shin, Yongcheol, 1998. "Generalized impulse response analysis in linear multivariate models," Economics Letters, Elsevier, vol. 58(1), pages 17-29, January.
    15. Sahbi Farhani, 2013. "Renewable Energy Consumption, Economic Growth and Co2 Emissions: Evidence from Selected Mena Countries," Energy Economics Letters, Asian Economic and Social Society, vol. 1(2), pages 24-41.
    16. Rafindadi, Abdulkadir Abdulrashid & Ozturk, Ilhan, 2017. "Impacts of renewable energy consumption on the German economic growth: Evidence from combined cointegration test," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 1130-1141.
    17. Gloria Cuevas-Rodriguez & Carmen Cabello-Medina, 2014. "Discovering Opportunities in the Solar Energy Industry: A Subjectivistic View of Entrepreneurial Activity," International Journal of Management and Sustainability, Conscientia Beam, vol. 3(3), pages 124-139.
    18. Tayfur BAYAT & Sebnem TAS & Izzet TASAR, 2017. "Energy Consumption is a Determinant of Economic Growth in BRICS Countries or Not?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(8), pages 823-835, August.
    19. Mohammad Z Hasan, 2017. "Transmission of International Energy Price Shocks to Australian Stock Market and its Implications for Portfolio Formation," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(4), pages 393-412, April.
    20. Yuan, Jia-Hai & Kang, Jian-Gang & Zhao, Chang-Hong & Hu, Zhao-Guang, 2008. "Energy consumption and economic growth: Evidence from China at both aggregated and disaggregated levels," Energy Economics, Elsevier, vol. 30(6), pages 3077-3094, November.
    21. Menegaki, Angeliki N., 2011. "Growth and renewable energy in Europe: A random effect model with evidence for neutrality hypothesis," Energy Economics, Elsevier, vol. 33(2), pages 257-263, March.
    22. Christopher N Ekong & Usenobong F Akpan, 2014. "On Energy Subsidy Reform and Sustainable Development in Nigeria," International Journal of Management and Sustainability, Conscientia Beam, vol. 3(4), pages 186-202.
    23. Sahbi Farhani & Jaleleddine Ben Rejeb, 2012. "Energy Consumption, Economic Growth and CO2 Emissions: Evidence from Panel Data for MENA Region," International Journal of Energy Economics and Policy, Econjournals, vol. 2(2), pages 71-81.
    24. Gloria Cuevas-Rodriguez & Carmen Cabello-Medina, 2014. "Discovering Opportunities in the Solar Energy Industry: A Subjectivistic View of Entrepreneurial Activity," International Journal of Management and Sustainability, Conscientia Beam, vol. 3(3), pages 124-139.
    25. Fang, Yiping, 2011. "Economic welfare impacts from renewable energy consumption: The China experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 5120-5128.
    26. T Kobayashi & H Kanematsu & R Hashimoto & K Morisato & N Ohashi & H Yamasaki & S Takamiya, 2013. "Study on Environment and Energy Using Belonging Materials," International Journal of Sustainable Development & World Policy, Conscientia Beam, vol. 2(4), pages 50-58.
    27. Jaganath Behera, 2015. "Examined the Energy-Led Growth Hypothesis in India: Evidence from Time Series Analysis," Energy Economics Letters, Asian Economic and Social Society, vol. 2(4), pages 46-56, December.
    28. Azlina, A.A. & Law, Siong Hook & Nik Mustapha, Nik Hashim, 2014. "Dynamic linkages among transport energy consumption, income and CO2 emission in Malaysia," Energy Policy, Elsevier, vol. 73(C), pages 598-606.
    29. Nur Hidayah binti Mohd Razali & Wan Mohamad Asyraf Bin Wan Afthanorhan, 2014. "Improving Energy Conservation Using Six Sigma Methodology at Faculty of Computer and Mathematical Sciences (FSKM), Universiti Teknologi Mara (UiTM), Shah Alam," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 2(2), pages 52-68.
    30. Daniel Kimuli & Resty Nabaterega & Noble Banadda & Isa Kabenge & Adipala Ekwamu & Paul Nampala, 2017. "Advanced Education and Training Programs to Support Renewable Energy Investment in Africa," International Journal of Education and Practice, Conscientia Beam, vol. 5(1), pages 8-15.
    31. Edet Okon Anwana & Boniface Akpan, 2016. "Power Sector Reforms and Electricity Supply Growth in Nigeria," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 3(1), pages 94-102.
    32. Nur Hidayah binti Mohd Razali & Wan Mohamad Asyraf, 2014. "Improving Energy Conservation Using Six Sigma Methodology at Faculty of Computer and Mathematical Sciences (FSKM), Universiti Teknologi Mara (UiTM), Shah Alam," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 2(1), pages 52-68, March.
    33. T. Kobayashi & H. Kanematsu & R. Hashimoto & K. Morisato & N. Ohashi & H. Yamasaki & S. Takamiya, 2013. "Study on Environment and Energy Using Belonging Materials," International Journal of Sustainable Development & World Policy, Conscientia Beam, vol. 2(4), pages 50-58.
    34. Daniel Kimuli & Resty Nabaterega & Noble Banadda & Isa Kabenge & Adipala Ekwamu & Paul Nampala, 2017. "Advanced Education and Training Programs to Support Renewable Energy Investment in Africa," International Journal of Education and Practice, Conscientia Beam, vol. 5(1), pages 8-15.
    35. Mohammad Z Hasan, 2017. "Transmission of International Energy Price Shocks to Australian Stock Market and its Implications for Portfolio Formation," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(4), pages 393-412.
    36. Apergis, Nicholas & Payne, James E. & Menyah, Kojo & Wolde-Rufael, Yemane, 2010. "On the causal dynamics between emissions, nuclear energy, renewable energy, and economic growth," Ecological Economics, Elsevier, vol. 69(11), pages 2255-2260, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bogna Janik & Katarzyna Maruszewska, 2020. "Valuation of the Environmental Effects of Socially Responsible Investments in Europe," Sustainability, MDPI, vol. 12(23), pages 1-18, November.
    2. Mohammad Sulieman Jaradat & Khaled Abdalla Moh d AL-Tamimi, 2022. "Economic Impacts of Renewable Energy on the Economy of UAE," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 156-162.
    3. Gamal Alkawsi & Yahia Baashar & Ammar Ahmed Alkahtani & Chin Wai Lim & Sieh Kiong Tiong & Mohammad Khudari, 2021. "Viability Assessment of Small-Scale On-Grid Wind Energy Generator for Households in Malaysia," Energies, MDPI, vol. 14(12), pages 1-18, June.
    4. Roberto J. Santill n-Salgado & Humberto Valencia-Herrera & Francisco Venegas-Mart nez, 2020. "On the Relations among CO2 Emissions, Gross Domestic Product, Energy Consumption, Electricity Use, Urbanization, and Income Inequality for a Sample of 134 Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 195-207.
    5. Suki, Norazah Mohd & Suki, Norbayah Mohd & Afshan, Sahar & Sharif, Arshian & Meo, Muhammad Saeed, 2022. "The paradigms of technological innovation and renewables as a panacea for sustainable development: A pathway of going green," Renewable Energy, Elsevier, vol. 181(C), pages 1431-1439.
    6. Mantas Svazas & Yuriy Bilan & Valentinas Navickas, 2024. "Research Directions of the Energy Transformation Impact on the Economy in the Aspect of Asset Analysis," Sustainability, MDPI, vol. 16(6), pages 1-21, March.
    7. Ahmad Almashaqbeh & Hasnah Shaari & Hijattulah Abdul-Jabbar, 2019. "The Effect of Board Diversity on Real Earnings Management: Empirical Evidence From Jordan," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 495-508, August.
    8. Jozef R. Pattiruhu & Shella Kriekhoff, 2022. "Energy Consumption Impact on Economic Management: Evidence from Indonesian Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 270-279, May.
    9. Farrukh Nawaz Kayani, 2021. "Renewable Energy and Economic Growth Nexus: A Case of United Arab Emirates," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 504-509.
    10. Li, Baolin & Wang, Jia & Nassani, Abdelmohsen A. & Binsaeed, Rima H. & Li, Zeyun, 2023. "The future of Green energy: A panel study on the role of renewable resources in the transition to a Green economy," Energy Economics, Elsevier, vol. 127(PB).
    11. Sakib Bin Amin & Yaron Nezleen Amin & Mahatab Kabir Khandaker & Farhan Khan & Faria Manal Rahman, 2022. "Unfolding FDI, Renewable Energy Consumption, and Income Inequality Nexus: Heterogeneous Panel Analysis," Energies, MDPI, vol. 15(14), pages 1-21, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad Salman Shabbir & Mohd Noor Mohd Shariff & Muzaffar Asad & Rabia Salman & Israr Ahmad, 2018. "Time-frequency Relationship between Innovation and Energy Demand in Pakistan: Evidence from Wavelet Coherence Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 251-258.
    2. Sharif, Arshian & Raza, Syed Ali & Ozturk, Ilhan & Afshan, Sahar, 2019. "The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: A global study with the application of heterogeneous panel estimations," Renewable Energy, Elsevier, vol. 133(C), pages 685-691.
    3. Mohd Haizam Mohd Saudi & Obsatar Sinaga & Djoko Roespinoedji & Erlane K. Ghani, 2019. "The Impact of Technological Innovation on Energy Intensity: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 11-17.
    4. Jahangir S M Rashed & Dural Betul Yuce, 2018. "Crude oil, natural gas, and economic growth: impact and causality analysis in Caspian Sea region," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 54(3), pages 169-184, September.
    5. Li, Raymond & Lee, Hazel, 2022. "The role of energy prices and economic growth in renewable energy capacity expansion – Evidence from OECD Europe," Renewable Energy, Elsevier, vol. 189(C), pages 435-443.
    6. Seong-Hoon Lee & Yonghun Jung, 2018. "Causal dynamics between renewable energy consumption and economic growth in South Korea: Empirical analysis and policy implications," Energy & Environment, , vol. 29(7), pages 1298-1315, November.
    7. Saidi, Hichem & El Montasser, Ghassen & Ajmi, Noomen, 2018. "Renewable Energy, Quality of Institutions and Economic Growth in MENA Countries: a Panel Cointegration Approach," MPRA Paper 84055, University Library of Munich, Germany.
    8. Bothwell Nyoni & Andrew Phiri, 2020. "Renewable Energy - Economic Growth Nexus in South Africa: Linear, Nonlinear or Non-existent?," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 635-644.
    9. Le, Thanh Ha, 2022. "Connectedness between nonrenewable and renewable energy consumption, economic growth and CO2 emission in Vietnam: New evidence from a wavelet analysis," Renewable Energy, Elsevier, vol. 195(C), pages 442-454.
    10. Destek, Mehmet Akif, 2016. "Renewable energy consumption and economic growth in newly industrialized countries: Evidence from asymmetric causality test," Renewable Energy, Elsevier, vol. 95(C), pages 478-484.
    11. Aslan, Alper & Ocal, Oguz & Ozsolak, Baki & Ozturk, Ilhan, 2022. "Renewable energy and economic growth relationship under the oil reserve ownership: Evidence from panel VAR approach," Renewable Energy, Elsevier, vol. 188(C), pages 402-410.
    12. Adewuyi, Adeolu O. & Awodumi, Olabanji B., 2017. "Renewable and non-renewable energy-growth-emissions linkages: Review of emerging trends with policy implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 275-291.
    13. Radmehr, Riza & Henneberry, Shida Rastegari & Shayanmehr, Samira, 2021. "Renewable Energy Consumption, CO2 Emissions, and Economic Growth Nexus: A Simultaneity Spatial Modeling Analysis of EU Countries," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 13-27.
    14. Kahia, Montassar & Aïssa, Mohamed Safouane Ben & Lanouar, Charfeddine, 2017. "Renewable and non-renewable energy use - economic growth nexus: The case of MENA Net Oil Importing Countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 127-140.
    15. Balcilar, Mehmet & Ozdemir, Zeynel Abidin & Ozdemir, Huseyin & Shahbaz, Muhammad, 2018. "The renewable energy consumption and growth in the G-7 countries: Evidence from historical decomposition method," Renewable Energy, Elsevier, vol. 126(C), pages 594-604.
    16. Marques, António Cardoso & Fuinhas, José Alberto & Neves, Sónia Almeida, 2018. "Ordinary and Special Regimes of electricity generation in Spain: How they interact with economic activity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1226-1240.
    17. Shahbaz, Muhammad & Raghutla, Chandrashekar & Chittedi, Krishna Reddy & Jiao, Zhilun & Vo, Xuan Vinh, 2020. "The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index," Energy, Elsevier, vol. 207(C).
    18. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Does Renewable Energy Drive Sustainable Economic Growth? Multivariate Panel Data Evidence for EU-28 Countries," Energies, MDPI, vol. 10(3), pages 1-21, March.
    19. Tiba, Sofien & Omri, Anis, 2017. "Literature survey on the relationships between energy, environment and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1129-1146.
    20. Abbasi, Kashif Raza & Hussain, Khadim & Radulescu, Magdalena & Ozturk, Ilhan, 2022. "Asymmetric impact of renewable and non-renewable energy on the industrial sector in Pakistan: Fresh evidence from Bayesian and non-linear ARDL," Renewable Energy, Elsevier, vol. 187(C), pages 944-957.

    More about this item

    Keywords

    Renewable energy; economic well-being; ARDL bound testing; Malaysia.;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2019-01-34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.