The Effects Of Carbon Emissions, Renewable Energy Consumption, And Foreign Direct Investment On Economic Growth In The Asean-5: A Panel Data Analysis With Global Crisis Controls

Dicky Dwi Radhica, Muliahadi Tumanggor, Sri Murtiana, Desi Riza Ayu Koma, Angga Misbahuddin

Abstract


This study examines the effects of carbon emissions, renewable energy consumption, and foreign direct investment (FDI) on the economic growth of five ASEAN countries—Indonesia, Malaysia, Thailand, Singapore, and the Philippines—during the period 1990–2021. The analysis employs a balanced panel dataset comprising 160 observations and estimates panel data regression model. Model selection was conducted using the Chow test and the Breusch–Pagan Lagrange Multiplier (LM) test. To account for the effects of major external shocks, three dummy variables representing the 1998 Asian Financial Crisis, the 2008–2009 Global Financial Crisis, and the 2020 COVID-19 pandemic were incorporated into the model. The Chow test (F = 1.809, p = 0.130) and the LM test (χ² = 0.924, p = 0.336) indicate that the Common Effect Model (CEM), or Pooled OLS, is the most appropriate specification. Estimation using robust standard errors reveals that carbon emissions, renewable energy consumption, and FDI have no statistically significant effects on economic growth (p> 0.05). In contrast, all three crisis dummy variables exert negative and statistically significant effects (p < 0.01), with the 1998 Asian Financial Crisis and the COVID-19 pandemic producing the largest declines in economic growth. The model explains 55.75% of the variation in economic growth (R² = 0.5575). These findings suggest that economic growth in the ASEAN-5 is driven more by global macroeconomic shocks than by carbon emissions, renewable energy consumption, or FDI over the study period.

Keywords


Economic Growth; Carbon Emissions; Renewable Energy Consumption; Foreign Direct Investment; ASEAN-5.

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References


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DOI: http://dx.doi.org/10.52155/ijpsat.v58.2.8474

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