IDEAS home Printed from https://ideas.repec.org/a/eee/soceps/v96y2024ics0038012124002969.html
   My bibliography  Save this article

Exploring the role of governance in determining public-private investment in energy: New empirical insights from ASEAN

Author

Listed:
  • Peng, Dong
  • Farooq, Umar
  • Alam, Mohammad Mahtab
  • Khudoykulov, Khurshid

Abstract

The energy sector plays a pivotal role in driving economic growth and enhancing social welfare. However, the mobilization of sufficient investment including public and private remains crucial for advancing energy infrastructure development. Against this backdrop, this study aims to explore the role of governance in determining public-private investment in energy (PPE). The empirical analysis leverages a comprehensive dataset spanning 25 years from 1998 to 2022 and covering ASEAN nations. The study employs the CS-ARDL (cross-sectionally augmented autoregressive distributed lag) model for regression analysis to assess governance dimensions' long-term and short-term effects on PPE. Additionally, the study conducts robustness analysis by using the FMOLS (fully modified ordinary least square) model and an alternative proxy of governance i.e. EFI (economic freedom index) to validate the findings. The analysis reveals that governance exerts a significant and positive effect on PPE. Specifically, the dimensions of governance such as corruption control (COC), government effectiveness, political stability (POS), regulatory quality, etc. demonstrate robust positive associations with PPE. This positive relationship indicates that stronger governance institutions foster transparency, efficiency, and stability in the energy sector, attracting private-sector investments. The findings of this study have significant policy implications for policymakers, investors, and stakeholders seeking to promote sustainable energy transitions and socio-economic development within the ASEAN region. Specifically, it is essential to strengthen governance institutions, enhance regulatory frameworks, and foster public-private partnerships for energy investment. This study contributes to the existing literature by providing novel insights into the governance-energy investment nexus within the ASEAN region.

Suggested Citation

  • Peng, Dong & Farooq, Umar & Alam, Mohammad Mahtab & Khudoykulov, Khurshid, 2024. "Exploring the role of governance in determining public-private investment in energy: New empirical insights from ASEAN," Socio-Economic Planning Sciences, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:soceps:v:96:y:2024:i:c:s0038012124002969
    DOI: 10.1016/j.seps.2024.102096
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0038012124002969
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.seps.2024.102096?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Steven Tadelis & Oliver E.Williamson, 2012. "Transaction Cost Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    2. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    3. Ali Meftah Gerged & Eshani S. Beddewela & Christopher J. Cowton, 2023. "Does the quality of country‐level governance have an impact on corporate environmental disclosure? Evidence from Gulf Cooperation Council countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1179-1200, April.
    4. Tii N. Nchofoung & Nathanael Ojong, 2023. "Natural resources, renewable energy, and governance: A path towards sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1553-1569, June.
    5. Jeffrey Kouton & Wilfried Sanogo & Nandi Djomgoue, 2023. "Risk allocation in energy infrastructure PPPs projects in selected African countries: does institutional quality, PPPs experience and income level make a difference?," Economic Change and Restructuring, Springer, vol. 56(1), pages 537-580, February.
    6. Du, Juntao & Shen, Zhiyang & Song, Malin & Vardanyan, Michael, 2023. "The role of green financing in facilitating renewable energy transition in China: Perspectives from energy governance, environmental regulation, and market reforms," Energy Economics, Elsevier, vol. 120(C).
    7. Razzaq, Asif & Sharif, Arshian & Ozturk, Ilhan & Afshan, Sahar, 2023. "Dynamic and threshold effects of energy transition and environmental governance on green growth in COP26 framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 179(C).
    8. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    9. Bellakhal, Rihab & Ben Kheder, Sonia & Haffoudhi, Houda, 2019. "Governance and renewable energy investment in MENA countries:How does trade matter?," Energy Economics, Elsevier, vol. 84(C).
    10. Mr. Etienne B Yehoue & Miss Mona Hammami & Jean-François Ruhashyankiko, 2006. "Determinants of Public-Private Partnerships in Infrastructure," IMF Working Papers 2006/099, International Monetary Fund.
    11. Zhang, Peng & Li, Zeyun & Ghardallou, Wafa & Xin, Yan & Cao, Jie, 2023. "Nexus of institutional quality and technological innovation on renewable energy development: Moderating role of green finance," Renewable Energy, Elsevier, vol. 214(C), pages 233-241.
    12. Andrea Prontera & Rainer Quitzow, 2022. "The EU as catalytic state? Rethinking European climate and energy governance," New Political Economy, Taylor & Francis Journals, vol. 27(3), pages 517-531, May.
    13. Xu, Si & Zhang, You & Chen, Lan & Leong, Lin Woon & Muda, Iskandar & Ali, Anis, 2023. "How Fintech and effective governance derive the greener energy transition: Evidence from panel-corrected standard errors approach," Energy Economics, Elsevier, vol. 125(C).
    14. Aleksy Kwilinski & Oleksii Lyulyov & Tetyana Pimonenko, 2023. "Inclusive Economic Growth: Relationship between Energy and Governance Efficiency," Energies, MDPI, vol. 16(6), pages 1-16, March.
    15. Jun Wen & Umar Farooq & Suhaib Anagreh & Mosab I. Tabash, 2022. "Quality of governance and corporate real investment: Assessing the impact of foreign aid," Bulletin of Economic Research, Wiley Blackwell, vol. 74(4), pages 1115-1134, October.
    16. Aluko, Olufemi Adewale & Opoku, Eric Evans Osei & Ibrahim, Muazu & Kufuor, Nana Kwabena, 2023. "Put on the light! Foreign direct investment, governance and access to electricity," Energy Economics, Elsevier, vol. 119(C).
    Full references (including those not matched with items on IDEAS)

    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. Dong, Zequn & Tan, Chaodan & Zhang, Wenxue & Zhang, Lixiang & Zhang, Lingran, 2024. "Are natural resources a blessing or a curse for renewable energy? Uncovering the role of regulatory quality and government effectiveness in mitigating the curse," Resources Policy, Elsevier, vol. 98(C).
    2. Satar Bakhsh & Md Shabbir Alam & Wei Zhang, 2024. "Green finance and Sustainable Development Goals: is there a role for geopolitical uncertainty?," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-30, August.
    3. Houssam, Nourhane & Ibrahiem, Dalia M. & El-Aasar, Khadiga M., 2024. "Insights from the N11 economies on drivers of the clean energy transition," Utilities Policy, Elsevier, vol. 90(C).
    4. Ting Su & Xiaokang Wang, 2024. "The impact of leadership on employees’ innovation behavior: evidence from China’s energy listed companies," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-8, December.
    5. Cepparulo, Alessandra & Eusepi, Giuseppe & Giuriato, Luisa, 2020. "Public finances and Public Private Partnerships in the European Union," MPRA Paper 103918, University Library of Munich, Germany.
    6. Lin, Boqiang & Okoye, Jude O., 2023. "Towards renewable energy generation and low greenhouse gas emission in high-income countries: Performance of financial development and governance," Renewable Energy, Elsevier, vol. 215(C).
    7. Olani Bekele Sakilu & Haibo Chen, 2024. "Realizing Carbon Neutrality in Top-Emitter Countries: Do Green Technology Innovation, Renewable Energy, Financial Development, and Environmental Tax Matters?," Sustainability, MDPI, vol. 17(1), pages 1-26, December.
    8. Tao, Weiliang & Weng, Shimei & Chen, Xueli & ALHussan, Fawaz Baddar & Song, Malin, 2024. "Artificial intelligence-driven transformations in low-carbon energy structure: Evidence from China," Energy Economics, Elsevier, vol. 136(C).
    9. Muhammad Zahid Rafique & Nicolas Schneider & Umer Shahzad & Malin Song, 2022. "High‐tech industries, financial expansion, and low‐carbon energy deployment along the Belt and Road Initiative," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1779-1795, December.
    10. Huang, Lilong & Dong, Dongdong & Dong, Xueqin, 2023. "Natural resources extraction, financial expansion and remittances: South Asian economies perspective of sustainable development," Resources Policy, Elsevier, vol. 84(C).
    11. Pata, Ugur Korkut & Alola, Andrew Adewale & Erdogan, Sinan & Kartal, Mustafa Tevfik, 2023. "The influence of income, economic policy uncertainty, geopolitical risk, and urbanization on renewable energy investments in G7 countries," Energy Economics, Elsevier, vol. 128(C).
    12. Manuchehr Irandoust, 2019. "Saving and investment causality: implications for financial integration in transition countries of Eastern Europe," International Economics and Economic Policy, Springer, vol. 16(2), pages 397-416, April.
    13. Nicholas M. Odhiambo & Talknice Saungweme, "undated". "Does International Tourism Spur International Trade In Ssa Countries? A Dynamic Panel Data Analysis," Working Papers AESRI07, African Economic and Social Research Institute (AESRI).
    14. Mehmet Balcilar & Daberechi Chikezie Ekwueme & Hakki Ciftci, 2023. "Assessing the Effects of Natural Resource Extraction on Carbon Emissions and Energy Consumption in Sub-Saharan Africa: A STIRPAT Model Approach," Sustainability, MDPI, vol. 15(12), pages 1-23, June.
    15. Ehigiamusoe, Kizito Uyi & Lean, Hooi Hooi & Smyth, Russell, 2020. "The moderating role of energy consumption in the carbon emissions-income nexus in middle-income countries," Applied Energy, Elsevier, vol. 261(C).
    16. Gangopadhyay, Partha & Jain, Siddharth & Bakry, Walid, 2022. "In search of a rational foundation for the massive IT boom in the Australian banking industry: Can the IT boom really drive relationship banking?," International Review of Financial Analysis, Elsevier, vol. 82(C).
    17. Dong, Kangyin & Sun, Renjin & Li, Hui & Liao, Hua, 2018. "Does natural gas consumption mitigate CO2 emissions: Testing the environmental Kuznets curve hypothesis for 14 Asia-Pacific countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 419-429.
    18. Relwendé Sawadogo, 2021. "The relationship between insurance and banking sectors in Sub-Saharan African: Does globalization matter?," Economic Change and Restructuring, Springer, vol. 54(1), pages 101-119, February.
    19. Mustafa Gomleksiz, 2023. "International Knowledge Spillovers and Economic Growth: New Evidence from High-Tech Imports and R&D Cooperation," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 73(73-1), pages 281-305, June.
    20. Yanli LI, Hongfeng PENG & Hongfeng PENG, 2013. "Inflation Persistence in Nine Latin American Countries: Panel SURKSS Test with a Fourier Function," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 132-143, October.

    More about this item

    Keywords

    ASEAN; Economic freedom index (EFI); Energy investment; Governance; Public-private investment in energy;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    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:eee:soceps:v:96:y:2024:i:c:s0038012124002969. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/seps .

    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.