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The Grim Cost of Economic Growth and Environmental Degradation: A Comprehensive Panel ARDL Study of Public Debt in the ASEAN-5 Countries

Author

Listed:
  • Mohd Shahidan Shaari

    (Faculty of Business & Communication, Universiti Malaysia Perlis, Arau 02600, Perlis, Malaysia)

  • Faiz Masnan

    (Faculty of Business & Communication, Universiti Malaysia Perlis, Arau 02600, Perlis, Malaysia)

  • Mohd Juraij Abd Rani

    (Faculty of Business & Communication, Universiti Malaysia Perlis, Arau 02600, Perlis, Malaysia)

  • Zaharah Zainal Abidin

    (Faculty of Business, Accountancy & Social Sciences, Universiti Poly-Tech Malaysia, Jalan 6/91, Taman Shamelin Perkasa, Cheras, Kuala Lumpur 56100, Malaysia)

  • Abdul Rahim Ridzuan

    (Faculty of Business and Management, Universiti Teknologi MARA, Melaka Campus, Alor Gajah 78000, Malaysia
    Institute for Big Data Analytics and Artificial Intelligence, Universiti Teknologi MARA, Shah Alam 40450, Malaysia
    Centre for Economic Development and Policy, Universiti Malaysia Sabah, Kota Kinabalu 88400, Malaysia
    Institute for Research on Socio Economic Policy, Universiti Teknologi MARA, Shah Alam 40450, Malaysia)

  • Norreha Othman

    (Faculty of Business, Accountancy & Social Sciences, Universiti Poly-Tech Malaysia, Jalan 6/91, Taman Shamelin Perkasa, Cheras, Kuala Lumpur 56100, Malaysia)

Abstract

This study uses panel ARDL analysis to investigate the connections between GDP growth, environmental degradation, and public debt in the ASEAN-5 countries (Malaysia, Thailand, the Philippines, Singapore, and Indonesia) from 1996 to 2021. It appears that economic development can increase public debt, but investment can reduce public debt in the long run. Moreover, there is a positive correlation between savings and public debt, but only in the short run. These findings raise important considerations for policymakers in striking a balance between economic development, environmental sustainability, and public debt. This study also suggests that savings may positively affect public debt in Indonesia. In contrast, investment may raise debt in the short term in Malaysia, the Philippines, and Singapore. The possible effects of corruption on public debt in the Philippines and environmental damage in both that country and Thailand are also highlighted. Keeping public debt at a manageable level requires policies that balance economic development and environmental protection, as emphasized by this research.

Suggested Citation

  • Mohd Shahidan Shaari & Faiz Masnan & Mohd Juraij Abd Rani & Zaharah Zainal Abidin & Abdul Rahim Ridzuan & Norreha Othman, 2023. "The Grim Cost of Economic Growth and Environmental Degradation: A Comprehensive Panel ARDL Study of Public Debt in the ASEAN-5 Countries," Sustainability, MDPI, vol. 15(14), pages 1-15, July.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:14:p:10756-:d:1189775
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    References listed on IDEAS

    as
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