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Exploring the Factors behind Renewable Energy Consumption in Indonesia: Analyzing the Impact of Corruption and Innovation using ARDL Model

Author

Listed:
  • Liton Chandra Voumik

    (Department of Economics, Noakhali Science and Technology University, Noakhali 3814, Bangladesh,)

  • Salma Akter

    (Department of Economics, Noakhali Science and Technology University, Noakhali 3814, Bangladesh,)

  • Mohammad Ridwan

    (Department of Economics, Noakhali Science and Technology University, Noakhali 3814, Bangladesh,)

  • Abdul Rahim Ridzuan

    (Faculty of Business and Management, Universiti Teknologi MARA, Melaka Campus, Alor Gajah 78000, Malaysia; & Institute for Big Data Analytics and Artificial Intelligence, Universiti Teknologi MARA, Shah Alam 40450, Malaysia; & Centre for Economic Development and Policy, Universiti Malaysia Sabah, Kota Kinabalu 88400, Malaysia; & Institute for Research on Socio Economic Policy, Universiti Teknologi MARA, Shah Alam 40450, Malaysia; & Accounting Research Institute, Universiti Teknologi MARA, Shah Alam, 40450, Malaysia)

  • Amin Pujiati

    (Faculty of Economics and Business, Universitas Negeri Semarang, 50229 Indonesia,)

  • Bestari Dwi Handayani

    (Faculty of Economics and Business, Universitas Negeri Semarang, 50229 Indonesia,)

  • J. S. Keshminder

    (Faculty of Business and Management, Universiti Teknologi MARA Cawangan Selangor, 42300 Bandar Puncak Alam, Malaysia.)

  • Mohamad Idham Md Razak

    (Faculty of Business and Management, Universiti Teknologi MARA, Melaka Campus, Alor Gajah 78000, Malaysia,)

Abstract

The study examines the relationship between corruption, innovation, and renewable energy consumption in Indonesia using the Marshalian Demand Function (MDF) framework. The research analyzes data from 1984 to 2020 and applies several statistical tests to validate the model's accuracy. The Autoregressive Distributed Lag (ARDL) approach is applied to evaluate the long and short-term effects of several variables on renewable energy consumption. The study finds that economic growth, number of patents, and FDI positively impact renewable energy consumption in the long term, while urbanization has a negative impact. Trade openness has no long-term impact on renewable energy consumption. In the short term, FDI, corruption, and the number of patents were found to have a significant negative association with renewable energy consumption, while GDP had a significant positive correlation. Diagnostic tests validate the model's suitability and ensure that it lacks heteroscedasticity and serial correlation. The study emphasizes the importance of encouraging renewable energy consumption and addressing the problems of urbanization and corruption in Indonesia to achieve a more sustainable and energy-efficient future.

Suggested Citation

  • Liton Chandra Voumik & Salma Akter & Mohammad Ridwan & Abdul Rahim Ridzuan & Amin Pujiati & Bestari Dwi Handayani & J. S. Keshminder & Mohamad Idham Md Razak, 2023. "Exploring the Factors behind Renewable Energy Consumption in Indonesia: Analyzing the Impact of Corruption and Innovation using ARDL Model," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 115-125, September.
    • Handle: RePEc:eco:journ2:2023-05-14
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    More about this item

    Keywords

    renewable energy; corruption; innovation; ARDL model;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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