The Link Between Logging, Macroeconomic Indicators And Energyin Malaysia: A Bound Testing Approach
The link between growth and environmental degradation is an important issue being debated by many scholars.
This study explores the relationship between log productions and other explanatory variables namely, economic growth,
population, trade openness and energy consumptionin Malaysia for the 1980 to 2013 period. Autoregressive Distributed Lag
(ARDL) and Vector Error Correction VECM-granger causality tests are utilized to estimate the short run and long run
relationship and direction of causality among the selectedvariables. This study makes use of logging as dependent variable to
represent environmental degradation instead of deforestation. The result confirmed the existence of co-integration
relationship among the variables. The results also affirmed that growth-energy has causal effect on production of logs.
Keywords- Logging, Macroeconomic Indicators, Energy Consumption, Autoregressive Distributed Lag (ARDL).