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Exploring the nexus of electricity consumption, economic growth, energy prices and technology innovation in Malaysia

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  • Tang, Chor Foon
  • Tan, Eu Chye

Abstract

This study principally attempts to investigate the relationship between electricity consumption on the one hand and economic growth, energy prices and technology innovation in Malaysia on the other over the period, 1970–2009. The results of this study indicate that electricity consumption and its determinants are cointegrated. Specifically, the empirical results show that income positively affects electricity consumption, while energy prices and technology innovation negatively affect it in Malaysia over a long run. The Granger causality results reveal that technology innovation Granger-cause economic growth and electricity consumption in Malaysia. Moreover, we find that electricity consumption and economic growth Granger-cause each other both in the short and in the long run. Therefore, policymakers should increase investment in electricity infrastructure to ensure that electricity supply is sufficient for economic growth and development and at the same time encourage technology innovation to minimise the usage of fossil fuels. This could strike a balance between environmental quality and economic growth in Malaysia.

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Bibliographic Info

Article provided by Elsevier in its journal Applied Energy.

Volume (Year): 104 (2013)
Issue (Month): C ()
Pages: 297-305

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Handle: RePEc:eee:appene:v:104:y:2013:i:c:p:297-305

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Related research

Keywords: Causality; Cointegration; Electricity-growth; Malaysia; Technology innovation;

References

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Cited by:
  1. Tang, Chor Foon & Abosedra, Salah, 2014. "The impacts of tourism, energy consumption and political instability on economic growth in the MENA countries," Energy Policy, Elsevier, vol. 68(C), pages 458-464.
  2. Solarin, Sakiru Adebola & Shahbaz, Muhammad, 2013. "Trivariate Causality between Economic Growth, Urbanisation and Electricity Consumption in Angola: Cointegration and Causality Analysis," MPRA Paper 45580, University Library of Munich, Germany, revised 19 Mar 2013.
  3. Al-mulali, Usama & Fereidouni, Hassan Gholipour & Lee, Janice Y.M., 2014. "Electricity consumption from renewable and non-renewable sources and economic growth: Evidence from Latin American countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 290-298.
  4. Lin, Boqiang & Ouyang, Xiaoling, 2014. "Electricity demand and conservation potential in the Chinese nonmetallic mineral products industry," Energy Policy, Elsevier, vol. 68(C), pages 243-253.

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