Exploring the nexus of electricity consumption, economic growth, energy prices and technology innovation in Malaysia

This study intends to look into the link between home consumption, internet users, and economic growth in Malaysia as an effort to understand the condition of the three variables before the COVID-19 pandemic took place as an investigation of important indicators in efforts to recover the economy after the COVID-19 pandemic.We collected data from the world bank. We estimate the relationship between the variables of Education, Consumption, and Economic Growth in Malaysia using the Vector Autoregression (VAR) method in our research. We found that domestic consumption in Malaysia is important in driving economic growth and internet literacy in Malaysia. Domestic consumption before the Covid-19 era in Malaysia was a trigger for the increase in internet use in Malaysia as well as encouraging economic growth in Malaysia. It is important for Malaysia to consider increasing domestic consumption Malaysia using internet technology facilities in the pandemic and post-pandemic era as an effort to recover the Malaysian economy.

A re-examination of the relationship between electricity consumption and economic growth in Malaysia

Foreign direct investment (FDI) has been an important source of economic growth for Malaysia, bringing in capital investment, technology and management knowledge needed for economic growth. Thus, this paper aims to study the relationship between FDI and economic growth in Malaysia for the period 1970-2005 using time series data. Ordinary least square (OLS) regressions and the empirical analysis are conducted by using annual data on FDI and economy growth in Malaysia over the 1970-2005 periods. The paper used annual data from IMF International Financial Statistics tables, published by International Monetary Fund to find out the relationship between FDI and economic growth in Malaysia case. Results show that LGDP, LGNI and the LFDI series in Malaysia are I(1) series. There is sufficient evidence to show that there are significant relationship between economic growth and foreign direct investment inflows (FDI) in Malaysia. FDI has direct positive impact on RGDP, which FDI rate increase by 1% will lead to the growth rate increase by 0.046072%. Furthermore, FDI also has direct positive impact on RGNI because when FDI rate increase by 1 %, this will lead the growth increase by 0.044877%.

This study experimentally investigates the relationship between economic growth and government spending in Malaysia from 1990 to 2022 using time series data. The study analyzes the impact of total government spending on economic growth, covering housing, healthcare, social services, military, and education while identifying which sector has the most effect on economic growth. The Autoregressive Distributed Lag (ARDL) method is employed to evaluate the effects of these expenditures. The findings demonstrate that, in the short run, all variables significantly affect economic growth, hence refuting the null hypothesis. However, only trade openness and labor spending positively impact long-term economic growth. Research indicates that housing and education expenditures are the primary long-term drivers of economic growth in Malaysia. The data suggest that the Malaysian economy contradicts the Keynesian theory, as less government spending appears to improve the real GDP growth rate. The inverse relationship between government spending and economic growth indicates that government expenditure may not be the primary catalyst for economic growth, hence supporting Wagner’s law. These findings provide policymakers with essential insights for optimizing government spending to improve economic development results.

This study digs into the complex relationship that exists between the development of GDP in Malaysia and major macroeconomic variables. It is of the utmost importance to gain an understanding of the elements that influence GDP development to reduce the risk of sociopolitical instability. Because nations are becoming more aware of the various elements that could potentially affect economic growth, this study was prompted to determine the precise mechanisms that are at play because of this awareness. This study employs the Autoregressive Distributed Lag (ARDL) methodology to yield robust statistical insights into the nexus between macroeconomic variables and economic growth in Malaysia. We have used quarterly data ranging from the initial quarter (Q1) of 2000 to the last quarter (Q4) of 2020 for our analysis. The findings of this study provide important insights into the dynamic links between GDP growth and the selected macroeconomic determinants. As a result, the findings provide policymakers, academics, and practitioners with significant information that can be used to design economic plans that are informed by relevant data. In addition, this study emphasizes the necessity for future research endeavors to go deeper into this topic, bringing attention to the requirement for new views and the active participation of new academics, politicians, and practitioners. This concerted effort is necessary to promote sustainable economic growth and stability in Malaysia and elsewhere.

The impact of corruption on economic growth has been the subject of theoretical debate among economists, with some arguing that corruption hinders growth and development. In contrast, others suggest that it can positively affect the development process. As such, the effects of corruption on economic growth remain inconclusive. This study examines corruption's impact on economic growth, as measured by real GDP per capita (constant 2015 US$) in Malaysia. The study utilized the autoregressive distributed lag (ARDL) method to investigate the relationship between corruption and economic growth in Malaysia. The data used in the analysis were obtained from the World Bank and International Country Risk Guide data repository and covered the period of 1992-2021 annually. The Corruption Index was used to measure corruption. At the same time, other variables included economic growth (GDP), Gross Capital Formation (GCF), General Government Final Consumption Expenditure (GE), Individuals Using the Internet (INT), Labor Force (LF), and School Enrollment (SE) in Malaysia. The study's primary results are as follows: (1) corruption and economic growth in Malaysia have a long run relationship when considering the measures of GCF, GE, INT, LF, and SE in the model; (2) when the measures of GCF, GE, INT, LF, and SE were included interchangeably and combined in the model, corruption had a positive and significant impact on economic growth in Malaysia; (3) corruption and economic growth in Malaysia have a significant short-run relationship when considering the measures of GCF, GE, INT, LF, and SE in the model. The study's limitation relates to the data used, as alternative corruption measures beyond the corruption index could yield different outcomes. The study's distinctive contribution is exploring the impact and relationship between corruption and economic growth, specifically in Malaysia.

This study explores the indirect effect of corona virus (COVID-19) infections on economic growth in Malaysia using the industrial production index (IPI) as a proxy. Since the prevalence of COVID-19 infection, Malaysia’s economy has experienced swindles in its growth, just like other countries economy, and the struggle for survival among countries in which Malaysia’s economy is not exceptional becomes the current issue. This study incorporates the COVID-19 indirect impacts on economic growth which is conditional to COVID-19 deaths. It also explains a way forward for recuperation among economic sectors for faster economic growth in Malaysia. This paper uses the Auto Regressive Distributed Lag (ARDL) model to explore the indirect effect of COVID-19 infections on economic growth conditional on COVID-19 deaths in Malaysia. As an empirical study, the data used were monthly secondary data and were obtained from reliable sources. The findings from the results of the ARDL model, considering the unconditional model show that COVID-19 infections have a negative relationship with economic growth in Malaysia. The conditional models used to find the indirect impact of COVID-19 on economic growth considering the interaction of the variables at mean, maximum and minimum, prove that COVID-19 has an indirect negative effect on economic growth when COVID-19 deaths are at their mean and maximum. The marginal effect result shows a negative relationship and significance at 1%, indicating that increase in COVID-19 infections leads to decrease in economic growth in Malaysia conditional to COVID-19 deaths

This study examines the relationship among inflation, economic growth, and imports in Malaysia using annual time-series data from 1970 to 2018. As an open developing economy, Malaysia is highly exposed to external trade dynamics, making imports a critical component of domestic consumption, production, and economic development. Fluctuations in inflation and economic growth are therefore expected to play an important role in shaping import behaviour and overall macroeconomic stability. The study adopts a quantitative research design and utilises secondary data obtained from the World Bank. Imports are specified as the dependent variable, while inflation, measured by the Consumer Price Index (CPI)and economic growth, proxied by Gross Domestic Product (GDP), are treated as independent variables. Prior to estimation, the stationarity properties of the variables are examined using the Augmented Dickey–Fuller (ADF) unit root test. Following confirmation of stationarity after first differencing, the Ordinary Least Squares (OLS) method is employed to estimate the relationship among the variables. Diagnostic tests, including serial correlation and heteroskedasticity tests, are conducted to ensure the robustness and reliability of the estimated model. The empirical results reveal that economic growth has a positive and statistically significant effect on imports, indicating that higher output and income levels stimulate import demand in Malaysia. In contrast, inflation is negatively associated with imports, suggesting that rising price levels suppress import demand by reducing purchasing power and increasing costs. These findings confirm that inflation and economic growth jointly influence import behaviour in Malaysia. Overall, the study provides empirical evidence that macroeconomic stability is essential for sustaining balanced trade performance. The findings offer valuable insights for policymakers in designing effective inflation management and trade strategies to support sustainable economic growth in Malaysia. Keywords: Inflation; Economic Growth; Imports; Malaysia; Ordinary Least Squares

Capital and labour are common factors of production in boosting the economic growth. Apart from that, electricity consumption is a vital key to most industry sectors. However, there are very limited studies which consider this factor in the analysis particularly in Malaysia. Therefore, this study aims to investigate the effects of capital, labour and electricity consumption on economic growth in Malaysia using data period of 1982 to 2017. The autoregressive distributed lag bound testing approach was employed and the results reveal the significant effects of capital and electricity consumption on economic growth both in the short runs and the long runs. However, there is no significant effect of labour on economic growth in Malaysia for both short runs and long runs. The results may provide more understanding of prevalent factors of production that affects economic growth and can be a guideline for policy makers to boost the economic growth in Malaysia.

Economic growth is very important for a country’s developing. In economics, there are many components that affect a country's economic growth. Malaysia has undergone some changes in the structure of the economy since attaining the status of developing countries from the third world status since 1970-an. Hence, this study is conducted to identify the relationship between economic growth and others macroeconomics variables in Malaysia. There are three variables selected in this study; foreign direct investment, exports and employment. While economic growth is represented by the gross domestic product (GDP) variable. The study adopted ordinary least squares (OLS) method in order to develop the estimating modelling. This study applies annual time series data starting 1982 until 2014. The result shows that, exports and employment variables are important in influencing the economic growth in Malaysian in the long term. In contrast, the foreign direct investment variables are not important in influencing economic growth in Malaysia. According to diagnostic testing, the result further suggest that, first model is suffer of serious multicollinearity problem and second model survive of all diagnostic testing. Therefore the estimating models proposed in this study are robust.

This study examined the Granger causality between health care spending, economic growth, relative prices and life expectancy in Malaysia. This study covered the sample period from 1970 to 2010. Applying the newly developed cointegration test proposed by Bayer and Hanck (2010) to the Malaysian data, we found that the variables are cointegrated. The TYDL Granger causality test revealed that life expectancy and relative prices have bi-directional causality with health care spending. Nevertheless, there is evidence of unidirectional causality running from economic growth to health care spending in Malaysia. In addition, there is also unidirectional causality running from life expectancy to economic growth. In sum, health care spending does not stimulate economic growth directly but through its impact on improved health status as reflected by the life expectancy. Therefore, health care spending is important to improve the health status of the population and thus spur economic growth in Malaysia.

The main objective of this study is to empirically investigate the relationship between exports, Foreign Direct Investment (FDI) and the economic growth in Malaysia.Records of annual time series data from the year 1971 till 2013 have been utilized for this purpose. Upon testing the data for stationarity, the Auto Regressive Distributed Lag (ARDL) model has been applied for the purpose of empirical investigation.The empirical results indicate that the productivity factor and externality effect of exports on the non-export sector are found to be statistically, positively significant, with the exports also having a positive impact on the economic growth and FDI of the country.The results support Exports Led Growth (ELG) and FDI-Led economic Growth (FLG) in Malaysia. The finding further suggests that Malaysia should continuous pursue exports promotion and a liberal investment economic policy in order to maintain and bolster overall economic growth.

According to the neoclassical growth theory, export expansion could stimulate economic growth because it promotes specialisation and raises factor productivity. Thus, many developing countries depend heavily on export-orientated businesses to accelerate economic growth. Nevertheless, the causality evidences on the export-led growth hypothesis remain elusive and controversial. Two primary empirical questions emerged in the international trade and development literatures are: (a) Does the export-led growth hypothesis still valid? (b) Why causality evidences are inconsistent among studies? In light of these, the present study attempts to contribute to the export-led growth literature by using the Malaysian data set. This study covers the monthly data set from January 1975 to August 2010. To achieve the objectives of this study, we employ the leveraged bootstrap simulation causality test and also the rolling regression-based causality tests. The leveraged bootstrap simulation causality results suggest that exports and output growth are bilateral causality in nature. However, the rolling causality results demonstrate that the causality inferences for export-led growth hypothesis are unstable over time. For this reason, policy initiative to promote exports may not always stimulate economic growth and development in Malaysia. Therefore, balancing policy is urged to ensure that the economic growth in Malaysia can be materialised.

“Productivity isn't everything, but in the long run it is almost everything.” —Paul Krugman Introduction Sustained economic growth is commonly associated with higher living standards. It is for this reason that the preoccupation with economic growth is an ancient one which continues until today. Within the economics literature proper, theories of economic growth dates back to as far as Adam Smith's Wealth of Nations , published in 1776. More than two centuries later, growth theories continue to interest scholars and policy-makers albeit such theories have undergone significant changes, due partly to economic structure and development. The classical theories of Smith, Malthus and Ricardo, forged during the nascent stage of industrial revolution, were premised upon specialization, rapid population growth and diminishing returns. The post-World War II saw the formulation of growth theories by Harrod, Domar, Swan and Solow, which were primarily driven by capital accumulation within the Keynesian mode. The most recent vintages by Lucas and Romer in the 1980s broaden the scope of such theories to include human capital and technological innovation, factors that would imply increasing returns and the promise of sustained growth. Today, the cumulative theoretical and empirical literature is vast and substantial. Its influence on academics, officials from aid agencies and policy-makers has been substantial. Malaysia is no exception in this regard. For example, in the Sixth Malaysia Plan (1986–90), there is explicit mention of achieving higher growth through improvements in total factor productivity (p. 19). Malaysia's growth record since the country's independence in 1957 is quite enviable. However, the country's growth rate in recent years, especially since the Asian Financial Crisis, has been relatively sluggish. This has led to concerns on whether Malaysia is currently facing the problem of the middle-income trap. The objective of this chapter is to critically examine Malaysia's economic growth for the past two decades as well as discuss some of the policy options that might be useful for sustainable growth in the future. Section 2 of the chapter provides a brief summary of Malaysia's economic growth and economic structure during the period 1990–2010. Section 3 analyses the sources of growth of the Malaysian economy. Section 4 discusses some of the challenges and policy options for sustainable growth in the future. Section 5 concludes.

The aim of this study is to find out the time-series nexus of public debt and economic growth in Malaysia. For an upper-middle income country, Malaysia had experienced over 50% ratio of debt to GDP since 2009 until now. The question arises is whether this trend is healthy to the economy. With a focus into the debt-to-GDP ratio from 1970-2015, this study investigates the short-run and long-run relationship between public debt and economic growth in Malaysia. This study used secondary data by collecting time-series data (1970-2015) from the World Bank Data and Bank Negara Malaysia. Autoregressive Distributed Lag (ARDL) model is applied in this study to examine the relationship between debt and economic growth. Based on ARDL framework, it shows that there is a long-run effect between the debt and economic growth in Malaysia. While the significance value of Error Correction Term shows that there is a long-run adjustment in the short run. Generally, this study found government expenditures, in the long run, strongly influence the GDP per capita. Through the findings, the government expenditures could increase the GDP per capita. The study also reveals that any increment of the debt ratio will result in reduction of the GDP per capita.