Relationship between Energy Consumption, Foreign Direct Investment, and Labor Force Participation Using the VECM Model: Empirical Study in OECD Countries

Authors

  • Heru Wahyudi Economic Development, University of Lampung, Bandar Lampung, Indonesia.
  • Widia Anggi Palupi Economic Development, University of Lampung, Bandar Lampung, Indonesia.

DOI:

https://doi.org/10.32479/ijeep.13999

Keywords:

Granger Causality;, VECM;, Energy;, FDI;, OECD

Abstract

The purpose of this study is to determine the causal relationship as well as the long-term and short-term relationship between total energy consumption, foreign direct investment (FDI), and labor force participation rates in OECD countries from 1994 to 2019 using Granger Causality Test and Vector Error Correction Model (VCEM). In this study, it is found that energy consumption and FDI have a two-way causality, energy consumption and the labor force participation rate have a two-way causality and FDI and the labor force participation rate have a two-way causality. In the long term, FDI has a significant positive effect on energy consumption while labor force participation has an insignificant negative effect on energy consumption. Meanwhile, in the short term, FDI and labor force participation rates have no effect. This research contributes to decision-making in the field of energy, FDI, and improving the quality and quantity of the workforce in OECD countries.

Downloads

Download data is not yet available.

Downloads

Published

2023-03-24

How to Cite

Wahyudi, H., & Palupi, W. A. (2023). Relationship between Energy Consumption, Foreign Direct Investment, and Labor Force Participation Using the VECM Model: Empirical Study in OECD Countries. International Journal of Energy Economics and Policy, 13(2), 157–165. https://doi.org/10.32479/ijeep.13999

Issue

Vol. 13 No. 2 (2023)

Section

Articles

License

Submission of an article implies that the work described has not been published previously , that it is not under consideration for publication elsewhere, that its publication is approved by all authors and tacitly or explicitly by the responsible authorities where the work was carried out, and that, if accepted, will not be published elsewhere in the same form, without the written consent of the Publisher. The Editors reserve the right to edit or otherwise alter all contributions, but authors will receive proofs for approval before publication.