The interdependent relationship between sectoral productivity and disaggregated energy consumption in Malaysia: Markov Switching approach

This study examines the interdependent relationship between sectoral productivity and disaggregated energy consumption in Malaysia by employing the Markov Switching technique. Several outcomes are reached. Firstly, the regime movement of GDP during regime-2 is influenced by disaggregated energy consumption. Secondly, industrial and manufacturing productivity of regime-1 and regime-2 responded with disaggregated energy consumption. Finally, the regimes' carbon emissions depend on both of manufacturing and industrial productivity. This study recommends efficient consumption of energy and the use of green technology in order to minimise energy consumptions and environment pollution.