Energy use, emissions, economic growth and trade: A Granger non-causality evidence for Malaysia

Mohd Adib Ismail and Mawar Murni Yunus ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the relationship among energy, emissions and economic growth in Malaysia with the presence of trade activities. We employ Johansen’s (1995) approach to investigate the relationship. Using annual data from 1971 to 2007, the empirical results shows that there are long-run causalities among energy, emission and economic growth, and among energy, emissions, export and capital, while the short-run Granger non-causality test shows that there are unidirectional causalities running from energy to economic growth and capital, from economic growth to capital and from emissions to export. The short-run results show that the Malaysian data support the growth hypothesis relationship between energy and economic growth, in which the conservation policies such as reduction measures in energy use will not work to improve the environment. In contrast, in the long-run, the feedback hypothesis is observed. Therefore, we suggest the policy makers in Malaysia to focus on long-run conservation policies.

Keywords: Emissions; Economic growth; Export; VECM; Causality; Impulse-response function; Malaysia (search for similar items in EconPapers)
JEL-codes: C32 Q43 Q50 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:38473

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