Dynamic Impact of Macroeconomic Variables on the Ecological Footprint in Malaysia: Testing EKC and PHH*

Mehraaein, Mahmood and Afroz, Rafia and Rahman, Mehe Zebunnesa and Muhibbullah, Md (2021) Dynamic Impact of Macroeconomic Variables on the Ecological Footprint in Malaysia: Testing EKC and PHH*. Journal of Asian Finance, Economics and Business, 8 (5). pp. 583-593. ISSN 2288-4637 E-ISSN 2288-4645

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Abstract

The objective of this paper is to investigate the impact of economic growth (per capita real GDP), the square of per capita real GDP, energy use, financial development (FD), and foreign direct investment (FDI) on ecological footprint (EF) in the case of Malaysia over the period 1971–2014, by employing the ARDL approach. The long-run results revealed that economic growth has a significant positive impact on the ecological footprint and it implies that the economic growth deteriorates the environmental quality in Malaysia. Conversely, the square of GDP showed a negative and significant impact on the EF in the long run. As the coefficient of GDP in our study is positive and statistically significant while the coefficient of squared GDP is negatively significant, thus, this study supports the presence of the environmental Kuznets curve (EKC) hypothesis in the case of Malaysia. Furthermore, the result indicates that FDI has a positive and significant impact on the EF in the long run, which means a rise in FDI will enhance the environmental pollution level. Thus, it confirms the pollution haven hypothesis. Hence, it suggests that Malaysia imposes stricter environmental policies. Further, FDI and FD are causing GDP in Malaysia, but through increasing EF.

Item Type:	Article (Journal)
Uncontrolled Keywords:	: FDI, EKC, Pollution Haven Hypothesis, Energy Consumption
Subjects:	H Social Sciences > H Social Sciences (General)
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Dr Rafia Afroz
Date Deposited:	23 Sep 2021 11:07
Last Modified:	23 Sep 2021 11:07
URI:	http://irep.iium.edu.my/id/eprint/92450

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