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

Author

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  • 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
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    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

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