Scrutinizing the LCC Hypothesis in ASEAN-5: An Innovative Exploration Integrating Energy Intensity, Global Trade Dynamics, and Financial Inclusion Using DKSE and Quantile Regression

Scrutinizing the LCC Hypothesis in ASEAN-5: An Innovative Exploration Integrating Energy Intensity, Global Trade Dynamics, and Financial Inclusion Using DKSE and Quantile Regression | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Scrutinizing the LCC Hypothesis in ASEAN-5: An Innovative Exploration Integrating Energy Intensity, Global Trade Dynamics, and Financial Inclusion Using DKSE and Quantile Regression Mohammad Ridwan, Nazhat Nury Aspy, Tasfia Mahjabin, Md. Eleais, and 4 more This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-4800964/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study investigates how economic growth, energy intensity, financial inclusion, and trade globalization impact the load capacity factor in the ASEAN-5 region. Using data from 2000 to 2022 from reputable databases, the study analyzed the load capacity curve (LCC) hypothesis through comprehensive statistical analysis. Several diagnostic tests, such as cross-sectional dependence, slope homogeneity, unit root, and cointegration, to select a suitable long-run estimation model were conducted. The study utilized the Driscoll-Kraay standard error (DKSE) approach to address identified issues like cross-sectional dependence, heterogeneity, and unit root problems. DKSE estimation showed that the LCC hypothesis was not present in the ASEAN-5 region. It is worth noting that an inverted-U-shaped relationship between per capita income and the load capacity factor was found, emphasizing the complexity of economic dynamics in the region. Furthermore, the analysis revealed a strong correlation between energy intensity and the load capacity factor, with trade globalization having a significant negative effect. Surprisingly, financial inclusion did not show a significant correlation with the load capacity factor, highlighting the intricate role of financial accessibility in economic performance. To enhance the strength of the DKSE estimation, the study also utilized quantile regression analysis, which supported the results of the DKSE approach. The study confirmed that the LCC hypothesis is not applicable in the ASEAN-5 region and offered a more detailed analysis of the varying effects of energy intensity and trade globalization at different levels. Conclusively, this study provides valuable insights into the complex relationships among economic growth, energy intensity, financial inclusion, and trade globalization in the ASEAN-5 region. A thorough analytical approach enhances comprehension of sustainable development and economic resilience in the region, guiding policy decisions and future research efforts. JEL: Q43, G21, F14, D24, F15 energy intensity financial inclusion trade globalization load capacity ASEAN-5 Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-4800964","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":343532882,"identity":"f0cce575-6b46-40dc-90f3-1b7e72ad41c3","order_by":0,"name":"Mohammad Ridwan","email":"","orcid":"","institution":"Noakhali Science and Technology University","correspondingAuthor":false,"prefix":"","firstName":"Mohammad","middleName":"","lastName":"Ridwan","suffix":""},{"id":343532883,"identity":"bdd56fcb-9212-4f0b-955c-a4ac853f7d48","order_by":1,"name":"Nazhat Nury Aspy","email":"","orcid":"","institution":"Noakhali Science and Technology University","correspondingAuthor":false,"prefix":"","firstName":"Nazhat","middleName":"Nury","lastName":"Aspy","suffix":""},{"id":343532886,"identity":"149abc49-cacc-49da-a083-f561da9d2337","order_by":2,"name":"Tasfia Mahjabin","email":"","orcid":"","institution":"Noakhali Science and Technology University","correspondingAuthor":false,"prefix":"","firstName":"Tasfia","middleName":"","lastName":"Mahjabin","suffix":""},{"id":343532887,"identity":"0a03be86-b7a9-4cba-8620-cf1b7c492951","order_by":3,"name":"Md. 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Using data from 2000 to 2022 from reputable databases, the study analyzed the load capacity curve (LCC) hypothesis through comprehensive statistical analysis. Several diagnostic tests, such as cross-sectional dependence, slope homogeneity, unit root, and cointegration, to select a suitable long-run estimation model were conducted. The study utilized the Driscoll-Kraay standard error (DKSE) approach to address identified issues like cross-sectional dependence, heterogeneity, and unit root problems. DKSE estimation showed that the LCC hypothesis was not present in the ASEAN-5 region. It is worth noting that an inverted-U-shaped relationship between per capita income and the load capacity factor was found, emphasizing the complexity of economic dynamics in the region. Furthermore, the analysis revealed a strong correlation between energy intensity and the load capacity factor, with trade globalization having a significant negative effect. Surprisingly, financial inclusion did not show a significant correlation with the load capacity factor, highlighting the intricate role of financial accessibility in economic performance. To enhance the strength of the DKSE estimation, the study also utilized quantile regression analysis, which supported the results of the DKSE approach. The study confirmed that the LCC hypothesis is not applicable in the ASEAN-5 region and offered a more detailed analysis of the varying effects of energy intensity and trade globalization at different levels. Conclusively, this study provides valuable insights into the complex relationships among economic growth, energy intensity, financial inclusion, and trade globalization in the ASEAN-5 region. 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