Palm Oil Export and Environmental Pollution in Malaysia: Evidence from ARDL Approach

Abstract

This paper seeks to identify the effect of palm oil export on environmental pollutants. The National Income (GDP) and Foreign Direct Investment (FDI) were also included in the model as control variables. This study employs the auto-regressive distribution lag (ARDL) econometric technique, and the analysis is based on time series data from 1990 to 2020. The bound F-test and Johansen cointegration tests confirmed that palm oil export significantly accelerates environmental pollution. However, the results from the short-run estimate explore that all the variables are insignificant. This study concludes that Malaysia should control international trade activities to deal with pollution problems.

Does the Performance of Global Commodities Exhibit Co-movement and Long-run Relationship with the Palm Oil Companies?

“…Their empirical results are in line with [2] except that no causal effects were found between crude palm oil and exchange rate. Additional studies by [4] and [5] expanded their data by incorporating the Islamic stock index namely the FTSE Bursa Malaysia Emas Shariah (BMES). Both studies found causal relationships between palm oil, KLCI, and BMES, shedding light on the intricate dynamics at play within these markets.…”