Modelling the influence of natural resources and social globalization on load capacity factor: New insights from the ASEAN countries

Abstract

This study aims to evaluate the effect of natural resources and social globalization on load capacity factor in six ASEAN nations over the timeline from 1990 to 2020. To attain this objective, a diverse array of econometric methods, encompassing cross sectional dependency, slope homogeneity test, and second-generation stationary methods and cointegration techniques were applied. This research extended its analysis to include method of moment quantile regression fixed effects and fully modified ordinary least squares estimators to estimate the long-term relationships' coefficients. The results of the cointegration assessments provided confirmation of the existence of long-term equilibrium connections among the panel series in question. The long-term results of the study reveal a positive effect of natural resources, biomass energy and social globalization on load capacity factor levels, signifying the considerable potential of these indicators to impact environmental quality over the long term. In contrast, economic growth exerts a notable adverse influence on the environment quality in ASEAN. However, foreign direct investment has insignificant influence on load capacity in ASEAN. This study underscores that the ASEAN nations should embark on significant initiatives that emphasize the dual priorities of economic development and natural resource sustainability.