Research Article Published 20 July 2017

The Energy-Economic Growth Nexus in Indonesia

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How to Cite

Nugraha, A. T., & Osman, N. H. (2017). The Energy-Economic Growth Nexus in Indonesia. Journal of Business Management and Accounting, 7(2), 61-75. https://doi.org/10.32890/jbma2017.7.2.8819
Andhyka Tyaz Nugraha
School of Technology Management and Logistics, College of Business, Universiti Utara Malaysia, Sintok, Kedah, Malaysia
Nor Hasni Osman
School of Technology Management and Logistics, College of Business, Universiti Utara Malaysia, Sintok, Kedah, Malaysia
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Abstract

The aim of this study is to investigate the causal relationship between final energy consumption and economic growth for three main development sectors in Indonesia. In this study, we consider final energy consumption as energy indicator and the value added of development sectors as economic indicator. We use annual data from 1971 to 2014 and collected data from international energy agency and the world development indicator. We use Autoregressive distributed lag (ARDL) technique for cointegration and granger causality approach to explore direction of causality between the variables. We found a bidirectional relationship between energy and economic growth in the industrial sector in the long-run and in services sector in the short-run. Furthermore, we found a unidirectional relationship from economic growth to energy consumption in the services sector in the long-term and in the agriculture sector in the short and long terms. Based on these results, we concluded that economic growth is significantly influenced by final energy consumption on three development sectors in Indonesia, especially in the long-term. However, this study only focus on exploring energy-economic growth nexus on three development sectors in Indonesia and provide specific information for the policy makers on the three sectors in Indonesia. This study provides a new approach in terms of exploring energy-economic growth nexus in a single country and assess that energy-economic growth nexus in a single country should consider situations and conditions in each development sector.

Keywords
ARDL bounds granger causality final energy consumption economic growth development sector Indonesia

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Citation percentile 88th
Field-weighted citation impact 3.88
Works this article cites 42

From OpenAlex. A field-weighted impact of 1.00 is the world average for work of the same field, type and year. No Altmetric key is configured, so news, policy and social attention are not shown.

Identifiers
DOI · 10.32890/jbma2017.7.2.8819
OpenAlex · W2939068630
Semantic Scholar · CorpusID 159390253

References

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