WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 22, 2025
The Impact of Economic Growth, Trade and Urbanization on Electricity Consumption in Malaysia
Authors: , ,
Abstract: This study aimed to examine the effects of economic growth, trade, and urbanization on electricity consumption in Malaysia from 1990 to 2022. The research employed the ARDL-ECM methodology and determined that all factors were significant. Unit root tests (ADF, PP, and KPSS) indicate mixed cointegration at both levels and initial differences for the variables in the equation. Then, it is appropriate to utilize the Autoregressive Distributed Lag (ARDL) method test. The study found that ARDL (3, 3, 3, 4) was the best ARDL model to use. Urbanization had a favorable effect on energy use over the long run, but economic expansion and commerce had a negative effect. In the near run, though, economic expansion and urbanization had a good effect on power use, while trade had a bad effect. The speed of adjustment, ECT(-1), also had a big effect on how much electricity was used. Because of this, Malaysia's energy policies are not likely to hurt economic growth.
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Pages: 2578-2589
DOI: 10.37394/23207.2025.22.202