Investigating the Environmental Kuznets Curve in Malaysia

Pang, Weng Lok (2024) Investigating the Environmental Kuznets Curve in Malaysia. Final Year Project (Bachelor), Tunku Abdul Rahman University of Management and Technology.

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Abstract

The primary objective of this research paper is to study whether the Environmental Kuznet Curve (EKC) in Malaysia is true or not. This study mainly looks into how the continuous economic development of Malaysia will affect the environment in the long term, as well as how the multinational corporations (MNC) affect the environment of Malaysia. This study use carbon emission per capita as the dependent variable, while Gross Domestic Product (GDP) per capita, Foreign Direct Investment (FDI), employment in the industry and energy consumption as the independent variable. The time period of data is starting from 1981 until 2020. In order to achieve the objective of this study, various econometric methods like unit root test, Vector Error Correction Model (VECM) and other diagnostic tests were utilised. The long-run estimation result suggests that GDP per capita and employment in the industry has a positive significant impact on Carbon emission per capita in Malaysia, while FDI and energy consumption has a negative significant impact on Carbon emission per capita in Malaysia. This concludes there is no EKC in Malaysia.