Factors determining energy consumption: Evidence from Indonesia, Malaysia and Thailand

The aim of this study is to verify empirically the impact of various factors on energy consumption in three ASEAN countries namely Indonesia, Malaysia and Thailand over the period 1980 to 2012. After using sundry appropriate diagnostic tests for checking time series data, the method of least square as an analytical technique is used for parameters estimation. The findings validate that FDI inflows, economic growth, trade openness and human development index have positive and statistically significant impacts on energy consumption. The other variable urbanization has positive and statistically significant impacts on energy consumption for Thailand and Indonesia only. While, the empirical results reveals that population growth rate has a positive and statistically significant relationship with energy consumption only in the case of Malaysia. So, in the light of determinations of the study, the policy implication is that energy policy needs to be orientated in favor of expanding the supply of energy to reach an enhanced degree of sustainable economic growth and development.