Racing towards environmental sustainability: a synergy between economic complexity, political stability, and energy transition: policy insight from a bootstrap time varying causality approach

ABSTRACT

Malaysia’s commitment to ecological quality is evident in its agendas for achieving a sustainable environment by 2030. However, hindrances like challenges towards energy transition efforts, stable political institutions, unclean economic globalization practices, and transiting to a complex economy could potentially delay the nation’s attainment of its environmental goals. Against this backdrop, the current study focuses on examining the roles of political risk, economic globalization, energy transition, and economic complexity on ecological sustainability in Malaysia. In contrast to previous studies, this study innovatively incorporates a dummy variable to account for potential structural breaks that may occur during the study period. Furthermore, this study used an innovative environmental proxy which incorporates both the demand and supply aspect of the environment during computation. Using the time series data from 1984 to 2018 and employed the ARDL estimator method, the empirical results indicate that economic globalization is associated with ecological deterioration in Malaysia in the long run. On the other hand, economic complexity, political stability, and energy transition are shown to promote ecological sustainability in Malaysia in the long run. Moreover, the bootstrap time varying causality method demonstrates that each of the regressors has the capacity to predict the load capacity factor during distinct sub-periods.

KEYWORDS:

• Malaysia
• economic complexity
• political stability
• bootstrap time varying causality
• energy transition

Disclosure statement

We can assert that there are no conflicts of interest concerning this research.

Ethical Approval

The ethical standards and practices required were been observed in this research.

Authors Contribution

All the authors contributed equally to the final manuscript.

Availability of data

The corresponding author can provide you with the data upon request.

Additional information

Funding

No specific funding was granted for this study