Dynamic relationship between energy efficiency, health expenditure and economic growth: in pursuit for SDGs in Malaysia

Purpose This paper aims to examine the dynamic relationship among energy efficiency, health expenditure and economic growth in Malaysia over the sample period of 1980-2016. Design/methodology/approach This study uses autoregressive distributed lag cointegration analysis and the causality approach by the vector error correction model to analyse the relationship among energy efficiency, which is proxied by energy intensity and the determinant factors. Findings The findings of this paper suggest long-run cointegration causal links between economic growth and health expenditure. However, a mixed conclusion for both determinants exists: an increase in real income contributes to more efficient use of energy sources, whereas an increase in government spending on health intensifies energy usage. Originality/value Most previous relevant research has focussed on energy efficiency as measured by economic intensity and economic growth and do not relate to the issue of health expenditure. The recent health catastrophe brought on by the COVID-19 epidemic emphasises the significance of allocating more resources to health care. The findings will be helpful in the development of energy efficiency and economic policies in pursuit of sustainable development goals.