Sallahuddin Hassan

A test of environmental Kuznets curve (EKC) for carbon emission and potential of renewable energy to reduce green house gases (GHG) in Malaysia

This study investigates the presence of environmental kuznets curve (EKC) for green house gases (GHG) measured by CO2 emission in Malaysia for the period 1970 to 2011. The study also examines the potential of the renewable source of energy to contain GHG. The long-run significant positive coefficient of GDP indicates that the GHG are increasing with economic growth while the insignificant coefficient on GDP square rejects the EKC transition. These results indicate a high GDP level for the EKC turning point for Malaysia. Therefore, it can be stated that only economic growth cannot reverse the environmental degradation in Malaysia. The government should have to come up with some policy measures to achieve CO2 emission reduction targets that Malaysia has pledged to achieve in Paris Submit (2015). The renewable energy production is found to have significant negative effect on CO2 emission. So government should focus on the renewable source of energy production and should frame a special policy for renewable energy production.

The Impact of Public Capital Expenditure on the Performance of Private Capital Expenditure in the Selected Economic Sectors in Malaysia

Economists have argued that public capital is one of the important business stimuli to the performance of private capital expenditure. This argument is considered as the main essence in the theory Public Capital Hypothesis (PCH) that proposed by Aschauer. PCH postulates that a positive relationship exists between private capital and public capital. However, this hypothesis remains a controversy as there has been no consensus, particularly in terms of empirical evidence. Therefore, the objective of this study is to prove the validity of the PCH by using a panel time series analysis on the four sectors of the Malaysian economy. Panel cointegration analysis is used to prove the hypothesis by using panel data for the period of 1976-2006. In this analysis, four sectors were chosen: agriculture, industry and trade, transportation and communication, and construction. Private capital expenditure for each sector is chosen as a dependent variable. Meanwhile independent variables used in the analysis are represented by public capital expenditure, gross domestic product, domestic credit ratio, and fiscal deficit. Findings of the study indicate that public capital expenditure has positive effect on private investment in all the sectors, except agriculture.