THE EFFECT OF FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH ON THE RENEWABLE ENERGY CONSUMPTION OF ASEAN COUNTRIES
Countries in the Southeast Asian region have achieved increased economic growth and continuous increase in foreign direct investment (FDI) for the last decade. However, economic development also causes an increase in energy consumption, which in the Southeast Asian region, the majority of it is stil...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/77546 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Countries in the Southeast Asian region have achieved increased economic growth and continuous increase in foreign direct investment (FDI) for the last decade. However, economic development also causes an increase in energy consumption, which in the Southeast Asian region, the majority of it is still generated from fossil fuels. Hence, there is an urgent need to transition to renewable energy. This research studied 10 members of the Association of Southeast Asian Nations (ASEAN) in the period 1990-2019 using panel data. This paper employs a combination of the panel unit root test, panel fixed effect model, and Granger causality to determine the impact of economic growth and FDI on the transition into renewable energy. According to the result of this study, there is a positive bidirectional causality effect between economic growth and renewable energy consumption. This study also reveals that in current conditions, the increase in FDI inflows still cannot be effectively used by ASEAN countries to assist in the transition into clean energy. |
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