IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2020-05-71.html
   My bibliography  Save this article

Energy Consumption and Economic Growth in Indonesia

Author

Listed:
  • Nguyen Duy Dat

    (Thuong Mai University, Ha Noi, Vietnam,)

  • Nguyen Hoang

    (Thuong Mai University, Ha Noi, Vietnam,)

  • Mai Thanh Huyen

    (Thuong Mai University, Ha Noi, Vietnam,)

  • Dinh Tran Ngoc Huy

    (Banking University, Ho Chi Minh City, Vietnam,)

  • Luong Minh Lan

    (Van Lang University, Ho Chi Minh City, Vietnam.)

Abstract

The aim of following study was to examine the relationship between energy consumption and economic growth in Indonesia. This study has used quantitative research design for assessing the energy consumption and its link with economic growth in Indonesia for the period of 2000-2019. The independent variable in this study was energy consumption whereas; dependent variable was economic growth in Indonesia .The data is analysed through E-views using Autoregressive Distributed Lag (ARDL) co-integration approach for long-run relationship, and long-run and short-run coefficients, Augmented Dickey Fuller (ADF) and Johansen co-integration. The findings have revealed that economic growth and energy consumption has association with each other. Within the given historic data, energy consumption has the ability to predict economic growth in Indonesia. The research can be improved through increasing sample size, number of variables and countries for comparison. This study also provides the guideline to the polcymakers that they should develop the policies related to the energy consumption that enhance the economic growth of the country.

Suggested Citation

  • Nguyen Duy Dat & Nguyen Hoang & Mai Thanh Huyen & Dinh Tran Ngoc Huy & Luong Minh Lan, 2020. "Energy Consumption and Economic Growth in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 601-607.
    • Handle: RePEc:eco:journ2:2020-05-71
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/10243/5325
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/10243/5325
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yıldırım, Ertugrul & Sukruoglu, Deniz & Aslan, Alper, 2014. "Energy consumption and economic growth in the next 11 countries: The bootstrapped autoregressive metric causality approach," Energy Economics, Elsevier, vol. 44(C), pages 14-21.
    2. Emeka Nkoro & Aham Kelvin Uko, 2016. "Autoregressive Distributed Lag (ARDL) cointegration technique: application and interpretation," Journal of Statistical and Econometric Methods, SCIENPRESS Ltd, vol. 5(4), pages 1-3.
    3. Muhammad Shahbaz & Smile Dube & Ilhan Ozturk & Abdul Jalil, 2015. "Testing the Environmental Kuznets Curve Hypothesis in Portugal," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 475-481.
    4. B. Bakhtyar & Tarek Kacemi & Md Atif Nawaz, 2017. "A Review on Carbon Emissions in Malaysian Cement Industry," International Journal of Energy Economics and Policy, Econjournals, vol. 7(3), pages 282-286.
    5. Bhattacharya, Mita & Paramati, Sudharshan Reddy & Ozturk, Ilhan & Bhattacharya, Sankar, 2016. "The effect of renewable energy consumption on economic growth: Evidence from top 38 countries," Applied Energy, Elsevier, vol. 162(C), pages 733-741.
    6. Bartleet, Matthew & Gounder, Rukmani, 2010. "Energy consumption and economic growth in New Zealand: Results of trivariate and multivariate models," Energy Policy, Elsevier, vol. 38(7), pages 3508-3517, July.
    7. Lefteris Tsoulfidis & Persefoni Tsaliki, 2019. "Classical Political Economics and Modern Capitalism," Springer Books, Springer, number 978-3-030-17967-0, December.
    8. Italo Colantone & Piero Stanig, 2018. "The Trade Origins of Economic Nationalism: Import Competition and Voting Behavior in Western Europe," American Journal of Political Science, John Wiley & Sons, vol. 62(4), pages 936-953, October.
    9. Sarwat Razzaqi & Faiz Bilquees & Saadia Sherbaz, 2011. "Dynamic Relationship Between Energy and Economic Growth: Evidence from D8 Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 50(4), pages 437-458.
    10. Alam, M. Shahid, 2006. "Economic Growth with Energy," MPRA Paper 1260, University Library of Munich, Germany.
    11. Tang, Chor Foon & Tan, Bee Wah & Ozturk, Ilhan, 2016. "Energy consumption and economic growth in Vietnam," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1506-1514.
    12. Inglesi-Lotz, Roula, 2016. "The impact of renewable energy consumption to economic growth: A panel data application," Energy Economics, Elsevier, vol. 53(C), pages 58-63.
    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. Huda, Adri & Kurniawan, Ian & Purba, Khairul Fahmi & Ichwani, Reisya & Aryansyah, & Fionasari, Richa, 2024. "Techno-economic assessment of residential and farm-based photovoltaic systems," Renewable Energy, Elsevier, vol. 222(C).
    2. Aditya Prana Iswara & Jerry Dwi Trijoyo Purnomo & Lin-Han Chiang Hsieh & Aulia Ulfah Farahdiba & Andrian Dolfriandra Huruta, 2022. "More Is More? The Inquiry of Reducing Greenhouse Gas Emissions in the Upstream Petroleum Fields of Indonesia," Sustainability, MDPI, vol. 14(11), pages 1-18, June.
    3. Kelvan Darrian & Yohanes B. Kadarusman & Dandy Rafitrandi, 2023. "Energy and Economic Growth Nexus: A Long-run Relationship in Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 69, pages 1-14, Juni.
    4. Ryan Wong & Aninda Dewayanti, 2024. "Indonesiaʼs energy transition: Dependency, subsidies and renewables," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 11(2), May.
    5. Xue Wu & Yaliu Yang & Conghu Liu & Guowei Xu & Yuxia Guo & Fan Liu & Yuan Wang, 2021. "Sustainability of Regional Agroecological Economic System Based on Emergy Theory: A Case Study of Anhui Province, China," Sustainability, MDPI, vol. 13(15), pages 1-21, July.
    6. Fatima Zahraa Tatou & Abdellah Yousfi & Tawfiq Rahaoui, 2023. "The Relationship between Economic Growth and Energy Consumption Disaggregated by Sector: The Case of Morocco," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 538-544, May.
    7. Cordelia Onyinyechi Omodero & Uwuigbe Uwalomwa, 2021. "Energy Absorption, CO2 Emissions and Economic Growth Sustainability in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 69-74.
    8. Ranti Darwin & Dyah Wulan Sari & Unggul Heriqbaldi, 2022. "Dynamic Linkages between Energy Consumption, Foreign Direct Investment, and Economic Growth: A New Insight from Developing Countries in Asia," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 30-36, November.

    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. Bilgili, Faik & Kuşkaya, Sevda & Toğuç, Nurhan & Muğaloğlu, Erhan & Koçak, Emrah & Bulut, Ümit & Bağlıtaş, H. Hilal, 2019. "A revisited renewable consumption-growth nexus: A continuous wavelet approach through disaggregated data," Renewable and Sustainable Energy Reviews, Elsevier, vol. 107(C), pages 1-19.
    2. 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.
    3. Dogan, Eyup & Altinoz, Buket & Madaleno, Mara & Taskin, Dilvin, 2020. "The impact of renewable energy consumption to economic growth: A replication and extension of Inglesi-Lotz (2016)," Energy Economics, Elsevier, vol. 90(C).
    4. Chen, Yiyang & Mamon, Rogemar & Spagnolo, Fabio & Spagnolo, Nicola, 2022. "Renewable energy and economic growth: A Markov-switching approach," Energy, Elsevier, vol. 244(PB).
    5. Islam, Md. Monirul & Irfan, Muhammad & Shahbaz, Muhammad & Vo, Xuan Vinh, 2022. "Renewable and non-renewable energy consumption in Bangladesh: The relative influencing profiles of economic factors, urbanization, physical infrastructure and institutional quality," Renewable Energy, Elsevier, vol. 184(C), pages 1130-1149.
    6. Hoang, Thi Hong Van & Shahzad, Syed Jawad Hussain & Czudaj, Robert L., 2020. "Renewable energy consumption and industrial production: A disaggregated time-frequency analysis for the U.S," Energy Economics, Elsevier, vol. 85(C).
    7. Huang, Jiashun & Li, Weiping & Guo, Lijia & Hu, Xi & Hall, Jim W., 2020. "Renewable energy and household economy in rural China," Renewable Energy, Elsevier, vol. 155(C), pages 669-676.
    8. Le, Thai-Ha & Nguyen, Canh Phuc, 2019. "Is energy security a driver for economic growth? Evidence from a global sample," Energy Policy, Elsevier, vol. 129(C), pages 436-451.
    9. Amri, Fethi, 2017. "The relationship amongst energy consumption (renewable and non-renewable), and GDP in Algeria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 62-71.
    10. Chang, Chiu-Lan & Fang, Ming, 2022. "Renewable energy-led growth hypothesis: New insights from BRICS and N-11 economies," Renewable Energy, Elsevier, vol. 188(C), pages 788-800.
    11. Nadia Singh & Richard Nyuur & Ben Richmond, 2019. "Renewable Energy Development as a Driver of Economic Growth: Evidence from Multivariate Panel Data Analysis," Sustainability, MDPI, vol. 11(8), pages 1-18, April.
    12. Rahman, Mohammad Mafizur & Velayutham, Eswaran, 2020. "Renewable and non-renewable energy consumption-economic growth nexus: New evidence from South Asia," Renewable Energy, Elsevier, vol. 147(P1), pages 399-408.
    13. Yvonne Gwenhure & Nicholas Odhiambo, 2015. "Energy consumption and growth: a review of international empirical literature," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2015(3), pages 47-70.
    14. Khadiga Mohamed El-Aasar & Shaimaa A. Hanafy, 2018. "Investigating the Environmental Kuznets Curve Hypothesis in Egypt: The Role of Renewable Energy and Trade in Mitigating GHGs," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 177-184.
    15. Ana-Maria Bercu & Gigel Paraschiv & Dan Lupu, 2019. "Investigating the Energy–Economic Growth–Governance Nexus: Evidence from Central and Eastern European Countries," Sustainability, MDPI, vol. 11(12), pages 1-21, June.
    16. Villanthenkodath, Muhammed Ashiq & Mahalik, Mantu Kumar, 2021. "Does economic growth respond to electricity consumption asymmetrically in Bangladesh? The implication for environmental sustainability," Energy, Elsevier, vol. 233(C).
    17. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    18. Olusegun Peter Olaoye & Aderemi Timothy Ayomitunde & Nwagwu Chinedu John & Yvonne Jude-Okeke & Azuh Dominic Ezinwa, 2020. "Energy Consumption and Foreign Direct Investment Inflows in Nigeria: An Empirical Perspective," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 491-496.
    19. Ostadzad, Ali Hossein, 2022. "Innovation and carbon emissions: Fixed-effects panel threshold model estimation for renewable energy," Renewable Energy, Elsevier, vol. 198(C), pages 602-617.
    20. Gerard Bikorimana & Charles Rutikanga & Didier Mwizerwa, 2020. "Linking energy consumption with economic growth: Rwanda as a case study," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2020(2), pages 181-200.

    More about this item

    Keywords

    Energy consumption; economic growth; GDP; CO2 emissions;
    All these keywords.

    JEL classification:

    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    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:journ2:2020-05-71. 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.