The Behavior of Electricity Production and Electricity Consumption in Triggering Economic Growth in Malaysia : Are There Any Differences?

• Main Authors: Dzul Hadzwan, Husaini, Lean, Hooi Hooi, Dyg Affizzah, Awang Marikan, Mohammad Affendy, Arip
• Format: Proceeding
• Language: English
• Published: 2022
• Subjects: HB Economic Theory
• Online Access: http://ir.unimas.my/id/eprint/41284/1/The%20Behavior%20of.pdf; http://ir.unimas.my/id/eprint/41284/

Electricity stimulates economic growth via two channels, ie. electricity production and electricity consumption. It is essential to think ahead on the acts of electricity production and electricity consumption in fostering economic growth. It helps the policymaker to prioritize correctly which sector, whether electricity production or electricity consumption, to be emphasized more in structuring productive energy policy. The aim of this research is to define and compare the roles of electricity production and consumption in driving Malaysian economic development. This research makes use of a time series dataset that spans 1982 to 2019. We employ Autoregressive Distributed Lag model (ARDL), variance decomposition and the Toda Yamamoto Causality test to figure out robust statistical evidence. We find electricity production has a greater effect on economic growth than electricity consumption. For the policy implication, we urge that the government spend more in electricity infrastructure to encourage improved energy efficiency. It is proposed that future research evaluates the behavior of electricity in driving economic growth in high-income, middle-income, and low-income countries. High-income countries, middle-income countries, and low-income nations all have varied levels of electricity infrastructure development. As a result, the nature of the electricitygrowth nexus varies.