HUMAN CAPITAL AND ENERGY: A DRIVER OR DRAG FOR ECONOMIC GROWTH

Youngho Chang (), Zheng Fang and Shigeyuki Hamori

The Singapore Economic Review (SER), 2020, vol. 65, issue 03, 683-714

Abstract: This paper examines a causal relationship between energy consumption, human capital and GDP for the ASEAN-5 (namely, Malaysia, Indonesia, Thailand, Singapore and the Philippines) over the period 1965–2011. It differs from the existing energy-growth nexus literature greatly by taking into consideration the role of human capital across countries. Both the single-equation estimation and the Johansen’s cointegration analysis suggest the presence of a long-run relationship among these variables. The exclusion test finds that human capital is a crucial factor in the cointegration space as much as conventional inputs of physical capital; and energy seems to play a less important role when human capital increases, indicating a possible substitution effect between the two variables. Using the Toda–Yamamoto test, it finds no long-run Granger causal link between energy use and economic development in the two net energy-exporter countries Malaysia and Indonesia and the city state Singapore, while in the Philippines economic growth Granger causes energy use and in Thailand a feedback effect is identified. Based on these results, policy implications are drawn.

Keywords: Energy-growth nexus; human capital; cointegration; Toda–Yamamoto causality; ASEAN-5 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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DOI: 10.1142/S0217590817500163

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