Examining the Equilibrium Relationships between Foreign Direct Investment Inflows and Employment in Manufacturing and Services Sectors: Evidence from Malaysia

The current paper examines the long-run and short-run equilibrium relationships between FDI inflows and employment in Malaysian manufacturing and services sectors using ARDL approach for the 19722011 period. It employs ADF and PP tests to detect the stationary levels of above variables. Also, it utilizes the bounds F-statistics test to identify the co-integration among variables. Results of ARDL approach indicate the presence of significant long-run and short-run equilibrium relationships between FDI inflows and employment in manufacturing and services sectors. The paper’s findings are of particular interest and importance to Malaysian policy makers towards increasing FDI inflows and employment in manufacturing and services sectors

Highlighting of the Factors and Policies affecting CO2 Emissions level in Malaysian Transportation Sector

Global CO2 emission and increasing fuel consumption to meet energy demand requirement has become a threat in recent decades. Effort to reduce the CO2 emission is now a matter of priority in most countries of the world including Malaysia. Transportation has been identified as the most intensive sector of carbon-based fuels and achievement of the voluntary target to meet 40% carbon intensity reduction set at the 15th Conference of the Parties (COP15) means that the emission from the transport sector must be reduced accordingly. This posed a great challenge to Malaysia and effort has to be made to embrace suitable and appropriate energy policy for sustainable energy and emission reduction of this sector. The focus of this paper is to analyse the trends of Malaysia's energy consumption and emission of four different transport sub-sectors (road, rail, aviation and maritime). Underlying factors influencing the growth of energy consumption and emission trends are discussed. Besides, technology status towards energy efficiency in transportation sub-sectors is presented. By reviewing the existing policies and trends of energy used, the paper highlights prospective policy options towards achieving emission reduction in the transportation sector

Causal Interaction among Electricity Consumption, Financial Development, Exports and Economic Growth in Jordan: Dynamic Simultaneous Equation Models

The goal of this paper is to examine the empirical dynamic relationship among the electrical consumption and economic growth (proxies by GDP per capita), export, and financial development (domestic credit to the private sector as a percentage of GDP) in Jordan over the 1976-2011 period. Annual time series data and the Autoregressive distributed lag (ARDL) model are used. The ADF, F-bound testing, Granger causality, GIRF, and CUSUM, CUSUMQ tests were applied to test the stationary, co-integration, causality and stability, respectively, among the variables. There is evidence of a long-term equilibrium relationship between electricity consumption and the economic growth, and a unidirectional relationship runs from real GDP to electrical consumption (ELC). This is indicating that per capita increase in economic growth may cause a perpetual rise in the ELC in Jordan. Keywords:  Electricity Consumption; Economic Growth; Co-integration; ARDL; Causality; Jordan. JEL Classifications: C32; O13; O20; Q4

A Structural Analysis of Energy Intensity Change in Malaysia

This research investigates the changes in Malaysia's energy intensity for the 2005-2010 period using structural decomposition analysis. Five contributing factors for energy intensity change namely energy mix, sectoral energy efficiency, production structure, final demand structure and final demand components are analysed. Results demonstrate that energy intensity has decreased but only at a minimal level. The prominent factor responsible for the decline was final demand components mainly due to the lower exports of the country as a result of the 2007/2008 global financial crisis. The production structure factor also contributed to a further decline in energy intensity which can be supported by the stronger dominant role played by services sector which is less energy intensive in addition to the lower contribution of manufacturing sector to gross domestic product. A larger decline in energy intensity was dampened by the positive effects demonstrated by the sectoral energy efficiency and final demand structure factors. The energy mix factor has also contributed to an upsurge in energy intensity but only at a minimal extent. Based on the research findings, several policy implications are highlighted to help Malaysia in achieving its sustainable energy use in the future. Keywords: Energy Intensity, Energy Efficiency, Structural Decomposition Analysis, Input-output Model, Malaysia JEL Classifications: C67, O44, Q4

Investigating the Driving Forces of Energy Intensity Change in Malaysia 1991-2010: A Structural Decomposition Analysis

This research investigates the changes in Malaysia's energy intensity from 1991 to 2010 using structural decomposition analysis. Energy mix, sectoral energy efficiency, production structure, final demand structure, and final demand components factors are analysed. Results show that energy intensity has increased, and the responsible factors of this change were production structure, final demand structure, and sectoral energy efficiency. Further, this increase was offset by the negative effect of the change in final demand components owing to smaller positive net exports (due to a larger increase in imports compared with the increase in exports) plus with lower investment in 2010 compared with 1991. In addition, energy mix change also has contributed to energy intensity decline but at a minimal extent. The prominent effect of the production structure factor can be explained by the industrialisation occurring in the country. The economic plans, which, among others, promote several energy intensive industries, had dampened energy efficiency initiatives. Policy suggestions are proposed to reduce the energy intensity of Malaysia. Keywords: Energy Intensity, Energy Efficiency, Structural Decomposition Analysis, Input-output Model, Malaysia JEL Classifications: C67, O44, Q43 DOI: https://doi.org/10.32479/ijeep.779

Investigating Factors Affecting CO2 Emissions in Malaysian Road Transport Sector

Today the unprecedented increase in CO2 emissions has become an important global issue because of the intensification in demand from the transport sector due to an upward surge in urbanisation and rapid economic growth. The demand for transport services is expected to rise further, causing the CO2 emissions level to increase as well. In Malaysia, the transportation sector accounts for 28% of total CO2 emissions, of which 85% comes from road transport. This has led to strong interest in how the CO2 emissions in this sector can be reduced effectively. This study aimed to investigate factors that influence the CO2 emissions. A multiple regression model was used based on fuel-based technology data for 1990 to 2013. Many factors influencing CO2 emissions, i.e., fuel consumption, fuel efficiency, fuel price and distance travel, were examined for the road transport sector in Malaysia. The results demonstrated that fuel efficiency, fuel price and distance travel were the main factors influencing the CO2 emissions growth. Some policy implications from the empirical results were proposed for CO2 emissions reduction. Keywords: CO2 emissions; energy consumption; road transportation; regression model; Malaysia. JEL Classifications: C13; Q48; N75; R4

Elasticity and Causality Among Electricity Generation from Renewable Energy and Its Determinants in Malaysia

Renewable energy is a significant issue in attaining low-carbon emissions for Malaysia's economic development path. Therefore, this study investigates the determinants (capital, labour, economic growth, and financial development), which has an influence on renewable energy generation, using time-series data from 1982 to 2015 period. The augmented Cobb–Douglas production function, F-bound test, and vector error correction model are employed to achieve the objectives of the study. The result of the analysis indicates a dynamic relationship among these variables. The long-run elasticity of capital and labour promotes renewable energy generation, while the responsiveness of economic growth and financial development undermine electricity generation from renewable energy. Furthermore, there is long-run bidirectional causal relationship between capital and renewable energy generation. Similarly, the feedback effect is found between labour and electricity generation from renewable energy. Economic growth and financial development are found to influence renewable energy generation. Accordingly, the Malaysian government should pursue policies to enhance the utilization of renewable energy sources toward national electricity supply security and sustainable socio-economic development. Keywords: Malaysia, renewable energy, financial development, sustainable energy, elasticity, causality JEL Classifications: E44, Q4, Q4

Highlighting Energy Policies and Strategies for the Residential Sector in Malaysia

Energy is an important catalyst for development. Malaysia is very fortunate to be endowed with oil reserves. However, these reserves are finite and not renewable. Being cognizant of this, the Malaysian government had implemented various energy policies and strategies to manage and safeguard its oil reserves for better energy security as well as to promote prudent use of energy. This paper aims to highlight the electricity sector in Malaysia and the various policies and strategies implemented thus far. By reviewing the existing energy policies and strategies as well as their implications, this paper suggests prospective policy and strategy options towards achieving better energy efficiency and emission reduction in the residential sector. The trends of electricity consumption and underlying factors influencing the growth of electricity consumption are also discussed. Keywords: residential electricity consumption; energy policies; renewable energy; energy efficiency, JEL Classifications: C54; Q48; Q54; R4

Examining the Feedback Response of Residential Electricity Consumption towards Changes in its determinants: Evidence from Malaysia

Residential electricity consumption in Malaysia is increasing rapidly and poses a threat to energy security. Therefore, it is very important to understand the way residential electricity consumption responds to its determinants so that effective measures to contain its rapid growth can be undertaken. The current study aims to examine the responsiveness of residential electricity consumption towards real disposable income, price of electricity, price of electrical appliances population and foreign direct investment in Malaysia for 1978-2013 period. Residential electricity consumption is only elastic towards real disposable income. The magnitude of own price elasticity is larger than cross elasticity of complements. The study shed some light on the responsiveness of residential electricity consumption, which can help Malaysia in developing new policies to control energy consumption without affecting economic growth adversely. Keywords: residential electricity consumption; complements; co-integration; elasticities; Malaysia. JEL Classifications: C32; N7; Q41; Q4

Impacts of Energy Subsidy Reforms on the Industrial Energy Structures in the Malaysian Economy: A Computable General Equilibrium Approach

The objective of this study is to analyze the effects of fuel subsidy removal on the industrial energy structures, which are crude oil, natural gas and coal, electricity and gas and petroleum products. A computable general equilibrium model and social accounting matrix for the Malaysian economy in 2005 are employed. Simulations based on different groups of scenarios (removing fuel subsidies, energy tax subsidies and both fuel subsidies and energy tax subsidies) were developed. The results showed that the fuel and tax subsidy reform policy had a stronger effect on energy consumption structures, which successfully reduced total energy consumption by 3.56%. This meant that removing fuel and tax subsidies could increase the potential energy savings by 1,286.35 ktoe. On the other hand, the higher fossil fuel price due to the subsidy removal encouraged the utilization of alternative energy, and consequently reduce dependency on fossil fuel. The energy subsidy reform policy not only significantly reduced the amount of the fossil fuel consumption, but simultaneously improved the real GDP and fiscal deficit in the government's budget. Importantly, the study concluded that the energy subsidy reform policy was found to be an efficient policy mechanism that supported the National Energy Efficiency Master Plan for 2010, as well as supported utilization of "fifth fuel” policy under the Malaysian Fuel Diversification Policy. Keywords: Fuel subsidy, tax subsidy, industrial energy structures, computable general equilibrium,  macroeconomic performance, Malaysia. JEL Classifications: H2, Q4