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Asymmetric Responses of Energy Consumption in Malaysia: Evidence from Nonlinear ARDL

Author

Listed:
  • Chung-Siong Tang

    (Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia.)

  • Mori Kogid

    (Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia.)

Abstract

Many studies have modelled the prices, growth, technology and financial effects on energy consumption in a linear fashion. However, structural changes may trigger asymmetric or nonlinear behaviour in time series analysis. In this paper, we examine the asymmetric influence of economic growth, energy prices, technological innovations and financial development on energy consumption in Malaysia over the period between 1970 and 2018 using a nonlinear ARDL (NARDL) model. The empirical results uncover the existence of asymmetric cointegration relationship between variables. A positive shock in income, energy prices and financial development leads to high energy consumption. Surprisingly, a fall in income does not lower the energy consumption. The results do not provide any evidence of technological effect on energy consumption. In addition, the energy consumption responds more elastically to negative shock than positive shock, which has implications for energy policy. The results also suggest that the short-run and long-run effects are asymmetrical. All variables are found to have asymmetric causal effect on energy consumption in the short-run.

Suggested Citation

  • Chung-Siong Tang & Mori Kogid, 2022. "Asymmetric Responses of Energy Consumption in Malaysia: Evidence from Nonlinear ARDL," International Journal of Energy Economics and Policy, Econjournals, vol. 12(4), pages 160-165, July.
    • Handle: RePEc:eco:journ2:2022-04-20
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    References listed on IDEAS

    as
    1. Sakib Bin Amin & Farhan Khan, 2020. "Modelling Energy Demand in Bangladesh: An Empirical Analysis," Journal of Developing Areas, Tennessee State University, College of Business, vol. 54(1), pages 39-52, January-M.
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    Cited by:

    1. Koushik Mandal & Radhika Prosad Datta, 2024. "Oil Price Dynamics and Sectoral Indices in India – Pre, Post and during COVID Pandemic: A Comparative Evidence from Wavelet-based Causality and NARDL," International Journal of Economics and Financial Issues, Econjournals, vol. 14(4), pages 18-33, July.

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    More about this item

    Keywords

    energy consumption; asymmetric; NARDL; Malaysia;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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