CO2 emissions, energy consumption and economic growth in the ASEAN-5 countries: A cross-sectional dependence approach

Qaiser Munir (), Hooi Hooi Lean () and Russell Smyth

Energy Economics, 2020, vol. 85, issue C

Abstract: We re-examine the relationship between CO2 emissions, energy consumption (EC) and economic growth (GDP) for the five main Association of Southeast Asian Nations (ASEAN-5) countries over the period 1980–2016. Our main contention is that the findings in previous studies that have examined the relationship between CO2, EC and GDP in the ASEAN-5 are biased because they fail to account for cross-sectional dependence (CD). We show that conventional tests applied to our dataset suggest a misleading conclusion about the Environmental Kuznets Curve (EKC) and Granger causal relationship between CO2, EC and GDP in the presence of CD. When we apply a new panel test of Granger non-causality that addresses CD and heterogeneity, we find considerable heterogeneity. We find unidirectional Granger causality running from GDP to CO2 for Malaysia, the Philippines, Singapore and Thailand; unidirectional causality running from GDP to EC in Indonesia, Malaysia and Thailand; unidirectional causality running from EC to GDP in Singapore and bidirectional causality between GDP and EC in the Philippines. We also find support for the EKC hypothesis for the ASEAN-5 countries.

Keywords: CO2 emissions; Energy consumption; Panel data; Cross-sectional dependence; ASEAN (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (118)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:85:y:2020:i:c:s0140988319303664

DOI: 10.1016/j.eneco.2019.104571

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