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Human Capital And Energy: A Driver Or Drag For Economic Growth

Author

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  • YOUNGHO CHANG

    (School of Business, Singapore University of Social Sciences, 461 Clementi Rd, Singapore, 599491, Singapore)

  • ZHENG FANG

    (School of Business, Singapore University of Social Sciences, 461 Clementi Rd, Singapore, 599491, Singapore)

  • SHIGEYUKI HAMORI

    (Graduate School of Economics, Kobe University, 2-1 Rokkodai, Nada-ku, Kobe 657-8501, Japan)

Abstract

This paper examines a causal relationship between energy consumption, human capital and GDP for the ASEAN-5 (namely, Malaysia, Indonesia, Thailand, Singapore and the Philippines) over the period 1965–2011. It differs from the existing energy-growth nexus literature greatly by taking into consideration the role of human capital across countries. Both the single-equation estimation and the Johansen’s cointegration analysis suggest the presence of a long-run relationship among these variables. The exclusion test finds that human capital is a crucial factor in the cointegration space as much as conventional inputs of physical capital; and energy seems to play a less important role when human capital increases, indicating a possible substitution effect between the two variables. Using the Toda–Yamamoto test, it finds no long-run Granger causal link between energy use and economic development in the two net energy-exporter countries Malaysia and Indonesia and the city state Singapore, while in the Philippines economic growth Granger causes energy use and in Thailand a feedback effect is identified. Based on these results, policy implications are drawn.

Suggested Citation

  • Youngho Chang & Zheng Fang & Shigeyuki Hamori, 2020. "Human Capital And Energy: A Driver Or Drag For Economic Growth," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(03), pages 683-714, June.
    • Handle: RePEc:wsi:serxxx:v:65:y:2020:i:03:n:s0217590817500163
    DOI: 10.1142/S0217590817500163
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    References listed on IDEAS

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    Cited by:

    1. Shahbaz, Muhammad & Song, Malin & Ahmad, Shabbir & Vo, Xuan Vinh, 2022. "Does economic growth stimulate energy consumption? The role of human capital and R&D expenditures in China," Energy Economics, Elsevier, vol. 105(C).
    2. Zheng Fang & Jiang Yu, 2020. "The role of human capital in energy-growth nexus: an international evidence," Empirical Economics, Springer, vol. 58(3), pages 1225-1247, March.

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