Malaysian Journal of Economic Studies

Impact of Carbon Pricing on Renewable Energy: A Comparative Study of Developing and Developed Countries

2025-12-30T14:12:11+08:00

The global energy transition is crucial in tackling climate change and achieving sustainable development, with renewable energy playing a central role in replacing fossil fuels. Therefore, many countries have implemented carbon pricing policies to internalise environmental externalities. While most of the existing literature focuses on the impact of such policies on carbon dioxide emissions, their influence on renewable energy capacity remains underexplored. We examine the impact of carbon pricing policies ‒ emissions trading schemes and carbon taxes ‒ on renewable energy capacity across 18 developing and 21 developed countries from 2006-2022. Given that the standard difference-in-differences approach may violate the parallel trends assumption due to cross-country heterogeneity, we employ a combination of propensity score matching and staggered DiD to mitigate selection bias and improve causal inference. We find that carbon pricing policies significantly increase renewable energy capacity in developing countries, both in the short run and long run. However, implementation of these policies appears to reduce renewable energy capacity in developed countries, possibly due to policy design, market maturity, or regulatory overlap. The findings highlight the importance of strengthening carbon pricing in developing countries, while developed economies may require more targeted reforms or complementary policies to enhance renewable energy development.

Nonlinear Dynamics of Information and Communication Technology, Income Diversification, and Competitiveness in Emerging Banking Markets: Evidence from Vietnam

2025-12-30T14:20:10+08:00

This study examines the effects of information and communication technology (ICT) adoption and income diversification (IDI) on bank competitiveness in emerging economies, with evidence from Vietnam. Both ICT and IDI serve as strategic drivers of performance, yet their joint and nonlinear impacts remain underexplored in developing financial systems undergoing digital transformation. Using a dynamic panel of 29 Vietnamese commercial banks from 2010 to 2022, the study employs the system generalized method of moments (S-GMM) estimator to address endogeneity and capture nonlinear and interaction effects. Bank competitiveness is measured by the Lerner index, with controls for bank-specific and macroeconomic factors, including the COVID-19 shock. The results indicate inverted U-shaped relationships between ICT, IDI and competitiveness, implying diminishing returns beyond optimal thresholds. The negative interaction between ICT and IDI suggests that simultaneous overinvestment may weaken competitive advantages, while macroeconomic volatility further moderates these effects. The study contributes to the literature by revealing the nonlinear and interactive mechanisms through which digital transformation and diversification jointly shape bank competitiveness in a developing economy, offering practical implications for balancing innovation and diversification strategies.

Spatial Pattern of the Association of E-commerce Adoption and Socio-digital Setting

2025-12-30T14:24:14+08:00

This study applies the multiscale geographically weighted regression to investigate the spatial behaviour of e-commerce and the relationship with digital knowhow level across provinces in Indonesia. The model was developed using e-commerce data from the Indonesian National Statistics Board and the Ministry of Information
and Communication of 2022. The result shows that only two variables had a significant impact on e-commerce adoption, namely access to the Internet and Generation X population. Furthermore, each variable has a different direction of a strong effect on e-commerce adoption levels. These results show that the covariates comprise a spatial barrier to adopting e-commerce and enrich the current understanding of e-commerce at the local level. Based on the result, policymakers can develop strategies to increase e-commerce adoption through promotion and campaign initiatives and target these at geographically strategic locations.

Factors Influencing Expenditure on Unhealthy Foods Among the Urban Poor in Malaysia

2025-12-30T14:27:50+08:00

Consumption of unhealthy foods possesses harmful effects on health, thereby increasing the disease burden. If low-income people, especially those living in urban areas, do not make efforts to reduce their consumption on unhealthy foods, the health‒economic costs borne by them will rise. To date, there is a growing number of Malaysian studies that examine factors affecting consumption expenditure on unhealthy foods, but none has paid attention to the urban poor. The objective of this study is to narrow this research gap. A seemingly unrelated regressions model was utilised to estimate the effects of sociodemographic and health factors on expenditure of oil and fats, processed foods, sugar-sweetened beverages and alcoholic drinks. Income and household size were positively associated with expenditure on unhealthy foods. Individuals who were between 61 and 70 years old had higher expenditure on unhealthy foods than their younger counterparts. The Chinese spent less on certain unhealthy foods compared to the Malays. Being employed, having tertiary-level education, being married and living with chronic diseases increased spending on unhealthy foods. These findings suggest that the Malaysian government should consider increasing the tax on sugar-sweetened beverages and using health campaigns to educate the urban poor about the risks of unhealthy foods.

Land-use Rights and Credit Access in Vietnam: The Role of Formal and Informal Lending in Financial Inclusion

2025-12-30T14:42:54+08:00

This paper examines how land-use rights affect household access to both formal and informal credit and how different credit sources relate to household income, using the 2020 Vietnam Household Living Standards Survey (VHLSS). We estimate probit models for borrowing choice across five lender types, Tobit models for loan amounts, and ordinary least squares (OLS) models for income effects, incorporating interaction terms to capture whether owned land is used as collateral. Results indicate that when land is pledged as collateral, loan amounts rise in both markets; for interest rates, formal pricing is largely policy invariant, while in informal markets collateral primarily sharpens the negative rate–scale slopes rather than uniformly lowering levels. We discuss mechanisms explaining why informal credit can have positive income effects (speed, contractual flexibility and embedded information) and highlight the policy implications of issuing land-use rights certificates and improving lending transparency.

Well-being in Retirement: Examining the Role of Retirement Resources, Moderated by Gender and Caring for Grandchildren

2025-12-30T14:48:07+08:00

We examined the impact of financial resources (FR), health resources (HR), social resources (SR) and psychological resources (PR) on retirement well-being (RWB) among older adults in Malaysia. Using a quantitative approach with non-probability sampling, a self-administered questionnaire was distributed to individuals aged 60 years and above, yielding 166 usable responses. Data were analysed using multivariate regression analysis based on their diverse backgrounds. The findings reveal that all four types of retirement resources significantly and positively affect RWB, with PR emerging as the strongest predictor, followed by FR. Gender moderates the relationship between FR, SR and PR, and RWB, indicating that men’s RWB is more influenced by FR and PR, while women benefit more from SR, though excessive SR can lower their RWB. The moderating effect of caring of grandchildren (CG) is insignificant for most resources except PR, where non-caregivers require strong PR to achieve similar levels of RWB. The findings highlight the importance of enhancing psychological resilience, financial resilience and social support among older adults. Practical implications include promoting health and wellness programs within the private sector and developing targeted policy interventions to strengthen retirees’ overall well-being and quality of life in Malaysia.

Shadow Economy and Foreign Direct Investment Inflows: Evidence from Malaysia

2025-12-30T14:54:11+08:00

Despite Malaysia’s reputation as one of the most attractive destinations for foreign direct investment (FDI) in Asia, the nation has experienced a downward trend in FDI flows since reaching a peak in 2011. This sustained decline warrants a critical examination of the shadow economy, a lesser-explored determinant of FDI, impeded by measurement challenges. By focusing on the roles of smuggling and tax evasion − two key components of the shadow economy − this study examines their impact on Malaysia’s attractiveness to foreign investors. Our research utilises data from Malaysian Customs annual reports from 1999 to 2018 and employs the autoregressive distributed lag technique to analyse the relationship between the shadow economy and FDI inflows. The findings reveal a significant negative impact: the uncertainties created by smuggling and tax evasion impose additional costs on investors, thereby deterring FDI. This study underscores the urgent need for Malaysia to enhance its investment climate through the establishment of transparent and unambiguous laws, rules and regulations,
thereby reducing investor uncertainty and revitalising FDI inflows.