Does Rubber Agriculture Development Affects the Rubber Crop Production Rate in Malaysia?

Abstract

Productivity is an ability to produce an output from a given set of inputs. Indirectly generated productivity will reflect efficiency and effectiveness in the use of resources such as technology, labor and others. Therefore, the objective of this study is to examine the long -term relationship and short -term relationship between the products of the rubber agriculture sector affect the income of Malaysia. Next, is to study the cause and effect relationship in the study variables. Several components have been identified in this study such as natural rubber production in Malaysia (TP), national income (GDP), investment (INV), and labor productivity (LF). This study examines the relationship between the extent to which the output of the rubber agriculture sector affects the income of Malaysia for the years 1990 to 2014. The data of this study was obtained from the Department of Statistics Malaysia, World Bank, and the Department of Labor Malaysia. The analyzes used to analyze these variables are the root unit method, Autoregressive Distributed Lag (ARDL) and Granger Causality method. The results of this study found that there is a positive relationship between the variables that can increase the output of the rubber agriculture sector. To increase the output of the rubber agriculture sector, various things need to be done. Besides, in improving technology related to rubber agriculture as well as open more job opportunities for the youth. At the same time, training schemes and capital incentives from the government are also able to encourage entrepreneurs to thrive in this sector.