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Powering Growth: The Dynamic Impact of Renewable Energy on GDP in ASEAN-5

Author

Listed:
  • Mahfuzur Rahman

    (Department of Finance and Economics, College of Business Administration, University of Sharjah, Sharjah 27272, United Arab Emirates)

  • Ngu Wang Keat

    (Faculty of Business and Economics, University of Malaya, Malaysia)

  • Md Abdul Kaium Masud

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

  • Mohamed Albaity

    (Department of Finance and Economics, College of Business Administration, University of Sharjah, Sharjah 27272, United Arab Emirates)

Abstract

This study investigates the dynamic relationships between renewable energy consumption, labor force, gross fixed capital (GFC), and GDP across ASEAN-5 nations from 1984 to 2020. Utilizing data from the World Development Indicators (WDI), the Energy Information Agency (EIA), and national labor statistics, we employ unit root tests, ARDL bound testing for cointegration, and Toda-Yamamoto causality procedures. Our findings indicate significant long-term cointegration between the studied variables in Indonesia and the Philippines, suggesting persistent economic relationships, while results for Malaysia show no cointegration and remain inconclusive for Thailand. The economic analysis reveals that GFC robustly drives GDP growth across these countries, whereas the impacts from labor force and renewable energy consumption are more variable. Causality tests further demonstrate that renewable energy consumption significantly fosters GDP growth in Indonesia, Malaysia, and Singapore, aligning with the growth hypothesis. Conversely, findings for the Philippines and Thailand support the neutrality hypothesis, indicating no direct causal impacts. These insights underline the crucial role of tailored renewable energy strategies to enhance economic growth and sustainability in ASEAN-5, providing valuable policy implications for regional energy governance.

Suggested Citation

  • Mahfuzur Rahman & Ngu Wang Keat & Md Abdul Kaium Masud & Mohamed Albaity, 2024. "Powering Growth: The Dynamic Impact of Renewable Energy on GDP in ASEAN-5," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 118-130, September.
    • Handle: RePEc:eco:journ2:2024-05-12
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    More about this item

    Keywords

    Renewable Energy; Economic Growth; ASEAN-5; Gross Fixed Capital; Labor Force;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • 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
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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