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Advances in Social Sciences Research Journal – Vol. 11, No. 2.2

Publication Date: February 25, 2024

DOI:10.14738/assrj.112.2.16409.

Zulkefli, N. A. I., Muda, R., Mokhtar, I., & Viverita, V. (2024). Driving Sustainability: Analyzing the Influence of Road Transportation

Infrastructure on Green Economic Growth in Malaysia. Advances in Social Sciences Research Journal, 11(2.2). 396-412.

Services for Science and Education – United Kingdom

Driving Sustainability: Analyzing the Influence of Road

Transportation Infrastructure on Green Economic Growth

in Malaysia

Nurul Aini Izzati Zulkefli

Faculty of Business & Management, Universiti Teknologi MARA, Malaysia

Ruhaini Muda

* Corresponding author: ruhaini@uitm.edu.my

Faculty of Business & Management, Universiti Teknologi MARA, Malaysia

and Accounting Research Institute, Universiti Teknologi MARA, Malaysia

Imani Mokhtar

Faculty of Business & Management, Universiti Teknologi MARA, Malaysia

V. Viverita

Faculty of Economics and Business, Universitas Indonesia, Depok, Indonesia

ABSTRACT

Road infrastructure is an important aspect of the green economy. It integrates

environmental, social, and economic factors with the aim of generating a positive

net environmental balance. The green Solow growth model proposes that road

infrastructure can enhance economic growth while improving environmental

quality. This paper examines the relationship between transportation

infrastructure and green economic growth in Malaysia, with the aim of ascertaining

whether road transportation infrastructure has a role in sustaining economic

growth. The study makes use of time series data over the period 1970-2021. This

study employs the autoregressive distributed lag (ARDL) model and the error

correction model (ECM). The study analyses three models of the total road network

and segregates them into federal roads and state roads. The findings show that

there are negative long-run relationships between transportation infrastructure

and green economic growth. The results also showed that Federal Road had a more

negative impact on green economic growth. However, in the short run, only Federal

Road shows a significant and negative impact on green economic growth. In

Malaysia, the federal road is classified as a primary road extensively utilised by the

populace for their routine activities. Thus, federal roads have the potential to

generate a more immediate and substantial influence on sustained economic

development in comparison to state roads. Nevertheless, road transportation

infrastructure can also have adverse effects on the sustainability of long-term

economic growth. This study sheds light on the importance of sustainable road

development that balances economic growth and the preservation of the

environment.

Keywords: Road transportation infrastructure, green economy, Malaysia.

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Zulkefli, N. A. I., Muda, R., Mokhtar, I., & Viverita, V. (2024). Driving Sustainability: Analyzing the Influence of Road Transportation Infrastructure on

Green Economic Growth in Malaysia. Advances in Social Sciences Research Journal, 11(2.2). 396-412.

URL: http://dx.doi.org/10.14738/assrj.112.2.16409

INTRODUCTION

The allocation of resources towards the development and maintenance of transport

infrastructure has a crucial role in fostering substantial economic growth. The presence of well- developed transport infrastructure has the potential to significantly impact the decisions made

by enterprises regarding the location of their production facilities and their access to markets.

It is anticipated that the decisions made by the enterprises will yield a net positive effect on the

economy, as they are projected to enhance tax revenues, foster job creation, and generate

resources that will contribute to overall economic expansion. Moreover, the advantages of

investing in transport infrastructure encompass enhanced accessibility to a broader and more

varied workforce, expedited access to suppliers and customers resulting in decreased

transaction expenses, extended market coverage facilitating greater options for suppliers and

consumers, and a mitigation of limitations imposed by land use. The presence of road transport

infrastructure plays a vital role in facilitating effective development, particularly in terms of

promoting individual economic activity and regional expansion, regardless of whether it is in

urban or rural areas.

Malaysia has made significant investments in transportation infrastructure over the years, with

a focus on expanding road, rail, and air services to boost regional development. However, when

compared to developed countries, Malaysia still lags behind in terms of the quality and

efficiency of its transportation infrastructure [1]. Despite the progress made, there are concerns

about the effectiveness and quality of rail-based transport in Malaysia, as the number of railway

passengers per unit length is far behind other countries like India, China, Japan, and Korea. This

indicates that efforts to promote rail-based transport in Malaysia have not shown promising

progress when compared internationally. The country's infrastructure development has faced

challenges such as local politics, corruption allegations, and the need for better integration of

different transport modes. In conclusion, while Malaysia has made substantial investments in

transportation infrastructure, there is still a need to address the quality and efficiency of its

transportation systems to catch up with developed countries. In addition, sustainable

transportation may be achieved if the transportation infrastructure characteristics are safety,

comfort, and efficiency in terms of economy and power usage, while also minimizing

environmental problems [2]. Sustainable transportation can be achieved if the transportation

infrastructure features safety, comfort, and efficiency in terms of economy and power usage,

while also assisting in the reduction of environmental problems.

To achieve sustainable economic growth, it is imperative to prioritise the sustainability of the

transportation infrastructure. Primarily, an issue that necessitates improvement pertains to

our deficiency in technological proficiency. In contemporary times, technology stands as a

significant determinant in fostering economic advancement across nations. The widespread

availability of high technology in Malaysia remains limited due to the substantial expenditure

required to fully capitalise on its advantages. In order to enhance the utilisation of technology,

particularly within the transportation sector, it is imperative that the government make a

greater budgetary allocation. This factor contributes to our relative technological lag compared

to industrialised nations. Their systems are significantly more advanced than ours.

In addition, the quality of infrastructure plays a significant role in enhancing productivity and

mitigating road fatalities. The absence of high-quality road transport infrastructure can lead to

the emergence of adverse externalities. The significance of infrastructure extends beyond its

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Advances in Social Sciences Research Journal (ASSRJ) Vol. 11, Issue 2.2, February-2024

Services for Science and Education – United Kingdom

mere quantity, encompassing its quality as well. Inadequate or underperforming infrastructure

can hinder economies from achieving their maximum economic potential. The findings of this

study validate the significance of infrastructure quantity in promoting economic growth.

However, it is evident that the presence of high-quality infrastructure yields more advantages

in generating productive and efficient output, hence exerting a more substantial influence on

the sustainability of economic growth. The components of sustainable development entail the

integration of sustainable economic growth and the fair allocation of resources to all segments

of society. In addition to this, a crucial aspect of implementing the Sustainable Development

Goals (SDGs) is to effectively monitor and ensure the welfare of society.

Transport Infrastructure and Sustainable Economic Development in Malaysia

In recent times, there has been a notable surge in the demand for road travel in Malaysia,

making it a highly sought-after method of transit throughout the year. Despite the positive

implications of increased road transport demand for facilitating daily activities, it is important

to acknowledge the negative consequences it imposes on the environment, primarily through

its overwhelming nature. The prevalence of road transport dominance can lead to road

congestion, which in turn increases the likelihood of traffic accidents resulting in road injuries

and fatalities. This phenomenon has a detrimental effect on economic growth, as it has the

potential to negatively impair the productivity of the nation. Allegedly, the anticipated outcome

of augmenting the transportation infrastructure was expected to yield a favourable effect on

this issue; nonetheless, it has transpired in a contrasting manner.

Malaysia ranks among the top three ASEAN countries with a significant incidence of road crash

fatalities. The ranking of road crash fatalities across ASEAN countries indicates a need for

improvement in the quality of transport in Malaysia. According to [3], there is an observed

increase in road fatalities despite the growth and improvement of the road transport sector.

The occurrence of road fatalities poses detrimental effects on economies due to the resultant

decline in individuals' productivity. Although economic growth has led to higher living

standards for many individuals, it has also resulted in adverse environmental impacts,

primarily stemming from the rapid expansion of infrastructure [4]. Malaysia has a longstanding

history of environmental pollution, which has escalated significantly in the past decade as a

result of economic expansion and an influx of foreign direct investment. One of the primary

factors that significantly contributes to the negative consequences of economic growth is the

escalation of environmental pollution [5]. There is a widely held belief that achieving a higher

quality of life necessitates the presence of sustained economic growth, as measured by GDP,

and an increased capacity for energy consumption [6]. However, it is also a well-established

reality that economic expansion is closely associated with increased energy consumption,

resulting in elevated levels of CO2 emissions and pollution. The majority of prior research has

emphasised the correlation between energy consumption and economic growth, as well as its

role in contributing to the escalation of CO2 emissions.

The empirical data pertaining to Malaysia's economic growth and CO2 emissions reveals a

positive correlation, indicating that as the nation's economy expands, there is a concurrent rise

in CO2 emissions inside the country [5]. The evidence demonstrates a positive correlation

between economic growth and the escalation of environmental degradation. The study is

conducted in the area of road transport infrastructure's impact on sustainable economic

growth for two main reasons. Firstly, it aims to examine the direct influence of road transport