Dynamic linkages among financial development, economic growth, energy consumption, CO2 emissions and gross fixed capital formation patterns in Malaysia

Hussain A. Bekhet, Tahira Yasmin, Raed Walid Al-Smadi

Research output: Contribution to journalReview article

4 Citations (Scopus)

Abstract

The aim of this research is to examine the dynamic relationship among financial development, economic growth, energy consumption, CO2 emissions and gross fixed capital formation in Malaysia. Time series data for the period 1970 to 2013, the ARDL model and multivariate Granger causality tests are used to determine the dynamic interrelationship among the study variables. The overall results show: 1) that all the variables are co-integrated during the study period; 2) a long-And short-run relationship existed between energy consumption and economic growth; 3) a long-run unidirectional Granger causality among the study variables is found; 4) there is a bidirectional causality running from economic growth to energy consumption and CO2 emission in the short run. It concludes that, with financial development and economic growth, effective energy policies need to cut the emissions level. The present study may guide the policymakers in formulating proper energy planning in Malaysia to attain future environmental targets while enhancing the financial perspective.

Original languageEnglish
Pages (from-to)493-523
Number of pages31
JournalInternational Journal of Business and Globalisation
Volume18
Issue number4
DOIs
Publication statusPublished - 01 Jan 2017

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)

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