Economic Growth In Malaysia Research Articles

Assessing the Role of Government Spending in Education and Economic Growth in Malaysia

Education is a key driver in developing human capital, which refers to a workforce's skills, knowledge, and abilities. A well-educated and skilled human capital resulted in being more productive, innovative, and adaptable to economic changes. This, in turn, contributes to higher economic growth. However, insufficient government spending on education poses a significant challenge, hindering human capital development essential for economic growth. Thus, the purpose of this study is to examine the role of government spending in education (TEDU) on economic growth (GDP) in Malaysia from 1990 to 2020 using Ordinary Least Square (OLS) estimation methods. Foreign Direct Investment (FDI) and total unemployment (UNEMP) are also included in the study as control variables. The result showed that TEDU and FDI are positively cointegrated with GDP, while UNEMP is negatively cointegrated with GDP. Findings show that government expenditure on education acts as a strategic investment that can extensively impact economic growth by promoting human capital development, enhancing productivity, and establishing a more inclusive and competitive economy. Policymakers should prioritize sustained investment in education for long-term economic development and global competitiveness.

Taking flight: Exploring the relationship between air transport and Malaysian economic growth

All facets of the tourism business, especially air travel, have been affected by the COVID-19 pandemic. The aviation industry continues to contribute to international economic expansion significantly. The article aims to identify the impact of the development of air transport on the economic development of the Malaysian economy. Therefore, the air-transportation-led growth hypothesis (ALGH) was investigated by examining whether airline travel boosts the Malaysian economy. The effects of air passengers (a stand-in for tourism) on Malaysia's GDP were examined in the long and short term. This study analyzed Data for Malaysia using an autoregressive distributed lag (ARDL) technique. The time covered was from 1970 to 2020. Certain control variables (i.e., energy consumption, financial development, social globalization, and urbanization) were also analyzed to see how they influenced economic expansion. Statistically significant effects of air travel on GDP were found in both the short and long term of this study, suggesting that this mode of transportation contributes to the sustained expansion of Malaysia's economy. Several methods, including Canonical Cointegration Regression (CCR), Dynamic Ordinary Least Squares (DOLS), and Fully Modified Ordinary Least Squares (FMOLS), were used to verify the results independently. The article offers legislative suggestions for improving the aviation industry's productivity, security, and bottom line.

Preparation and Characterization of Activated Palm Kernel Shell/Carboxylated Nitrile Butadiene Rubber (APKS/XNBR) Vulcanizate

Malaysia is one of the most important palm oil producers and exporters in the whole wide world. There has been a rapid development of new palm oil plantations and palm oil mills in this country. The palm oil industry plays a vital role in the economic growth of Malaysia. However, as the palm oil industry grows bigger and wider, a huge amount of palm oil waste is produced which is an alarming issue considering it can cause pollution and have a negative effect on the environment. Raw Palm Kernel Shell (PKS) derived from palm oil waste can be converted into Activated Palm Kernel Shell (APKS) which has the potential to be a value-added biofiller in rubber vulcanizates. Thus, in this study, APKS is prepared through a carbonization process at a temperature of 900 °C and an activation process via steam treatment and used as filler in Carboxylated Nitrile Butadiene Rubber (XNBR). The aim of this study is to evaluate the influence of different loading ratios of APKS on theswelling index measurement, bound rubber content (BRC), abrasion resistance, compression set, and hardness of XNBR vulcanizates. APKS is incorporated in XNBR at different loading ratios, ranging from 0 to 50 phr and these APKS-filled XNBR vulcanizates are prepared with a two-roll mill. The overall physico-mechanical properties of APKS-filled XNBR vulcanizates showed increment in terms of BRC, compression set, and hardness as the loading ratio of APKS increased. XNBR vulcanizates with a higher loading ratio of APKS also showed a decrease in swelling index measurement and volume loss which would indicate high abrasion resistance. These results could be attributed to the porosity of APKS as shown in the morphological analysis which provided a high surface area of contact for crosslinking and mechanical interlocking. This proves APKS could potentially be a semi-reinforcing filler for rubber vulcanizates, especially for XNBR vulcanizates as XNBR vulcanizates were able to achieve high abrasion resistance and high hardness with the incorporation of APKS. With this, the conversion of PKS into APKS could help to reduce palm oil waste and provide an environmentally friendly, sustainable biofiller option to rubber researchers and manufacturers who are looking for an alternative to petroleum-based fillers. This would be very beneficial for both the palm oil industry and the rubber industry.

AN EMPIRICAL ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND POPULATION AGING IN MALAYSIA

Malaysia is approaching the aging society status, raising concern about whether population aging is a challenge or an opportunity for Malaysia to attain higher economic growth. Using state-level data from 2011 to 2021, the results show that population aging is negatively associated with economic growth. The economic impact of population aging is substantial and larger than the conventional determinant of economic growth. Further analysis reveals that the growth-deteriorating effect of population aging is transmitted through the labor force and productivity growth channels. The findings urge policymakers to recognize the scope of the new demographic reality and adjust policies to address the economic implications of population aging.

China’s Foreign Direct Investment (FDI) in Malaysia: Impact on Malaysia’s Sustainable Development Goals (SDGs)

: Since its initiation, Malaysia has engaged in many BRI-related infrastructure and connectivity projects. These projects, which are mainly Foreign Direct Investments (FDI) from China, have mixed impacts on the three key dimensions enshrined in the UN Sustainable Development Goals (SDGs) - economy, society, and the environment. As FDI from China continues to be an important source of Malaysian economic growth, its contribution to the country’s SDG goals warrants further attention. The study examines China’s FDI impact on Malaysia’s SDG performance and finds that its presence positively influences index scores and global ranking performance. The impact on human capital is encouraging as moderate knowledge transfers and competition enhance workers’ skills. As for the environment, the impact is both positive and negative - gains from China’s investment in green technology but losses in environmental degradation. While the effect on political security and national security is generally positive, the social impact of China’s FDI cannot be determined due to data limitations. The study concludes that Malaysia should continue to engage with China to harness its positive impact toward achieving its SDGs.

Dynamic connection between energy prices, Malaysia's economic growth, and ecological footprint: An evidence from Morlet wavelet approach

Using the Morlet Wavelet approach and other time‐frequency decomposition techniques, this study investigates the dynamic relationship between energy prices, economic growth, and ecological footprint in Malaysia from 1975 to 2021. Our analysis reveals several key findings. Firstly, despite the absence of oil price volatility, the size of Malaysia's ecological footprint varies significantly over the study period. Secondly, energy prices contribute significantly to the ecological footprint. Thirdly, the association between energy prices and ecological footprint is stronger during periods of economic growth. Lastly, energy prices contribute to economic growth and inflation in the short run, but after factoring in the ecological footprint, the association extends into the long run. These findings suggest that Malaysia's economic growth is driven not only by energy prices but also by its ecological footprint. Moreover, the size of Malaysia's ecological footprint is driven by factors at the microeconomic level rather than energy prices alone. Therefore, the impact of energy prices on the macroeconomy, especially when considering the impact on the environment, is non‐linear.

Inventory Management Practices among Small and Micro Businesses during COVID-19 Pandemic

Developing micro, small, and medium businesses (SMEs) encourages Malaysia's economic growth. The Covid-19 pandemic has greatly affected SMEs. During the Covid-19 pandemic, with material shortages and shipping delays, the ability to track the inventory is critical. Adopting digital technology in the inventory tracking process will assist the company in managing its inventory effectively. SMEs need to have relevant knowledge and technical skills to adopt digital technology. Specifically, this study explores SMEs' current inventory management practices to gauge their knowledge of inventory management. Data was collected using semi-structured interviews using a questionnaire with ten SMEs in Selangor. This study documents that SME organisation value is positively associated with best inventory management practices. In addition, results show that divergence can intensify the negative relationship between low inventory management practices and SMEs' value. Findings support the need for more scrutiny by SME owners, regulators, policymakers, and standard setters to monitor the conflict, which is crucial for SMEs to overcome the issues and challenges they face. This study will contribute to the sustainability of SMEs, consistent with the national agenda to strengthen the SMEs as highlighted in the government’s new Economic Transformation Program (ETP) through Bumiputera’s Economic Transformation Agenda.

From growth to green: Navigating the complexities of economic development, energy sources, health spending, and carbon emissions in Malaysia

This study analyzes the impact of economic expansion, fossil fuel consumption, renewable energy adoption, and health expenditure on carbon dioxide (CO2) emissions in Malaysia from 1990 to 2021. The autoregressive distributed lag (ARDL) method is used to examine short and long-term consequences. The ARDL bounds test revealed evidence of cointegration among the variables in the long run which is verified by the Johansen cointegration test and Engle-Granger cointegration test. The empirical results suggest that increased economic expansion and fossil fuel usage are associated with higher CO2 emissions. In contrast, renewable energy use and health expenditure are linked with lower CO2 emissions in the long term. The Toda-Yamamoto causality test is also employed to investigate causal relationships between variables. The study recommends that the Malaysian government invest in green technology and promote policies that encourage sustainable practices. A green growth approach can ensure economic growth, mitigate environmental challenges, and achieve sustainable development goals. Health initiatives should also be prioritized to promote economic growth while mitigating environmental damage. This approach can reduce the country's reliance on fossil fuels, create new employment opportunities, and contribute to the overall well-being of the population. In conclusion, Malaysia's economic growth has led to an increase in energy demand and CO2 emissions. However, adopting a green growth approach by investing in renewable energy, sustainable practices, and health initiatives can pave the way for a sustainable and prosperous future.

The impact of population aging and fertility rate on economic growth in Malaysia

Purpose ― This study aims to examine the impact of population aging and fertility rates on economic growth in Malaysia for the sample spanning from 1961 to 2020.Method ― The study uses an Autoregressive Distributed Lagged (ARDL) model to examine the relationship between economic growth, the aging population, fertility rate, capital stock, and employment rate.Findings ― The main results provide evidence of a long-run relationship between aging, fertility rate, employment, and capital stock on Malaysian economic growth. The results also show that the aging population harms economic growth in the long run, but a decline in the fertility rate has been favorable to long-term economic growth.Implication ― These findings have significant implications for the execution and formulation of national aging and demographic policies and government efforts to achieve long-term fiscal sustainability.Originality ― This study empirically investigated the link between population aging and economic development, reflecting recent demographic trends in Malaysia. This study uses current data and an Autoregressive Distributed Lagged (ARDL) technique to analyze long-term economic growth and its association with supply-side determinants

Enhancing economic growth through financial inclusion: An ARDL analysis

This study explores the crucial relationship between financial inclusion and economic growth, which has become a primary focus for policymakers, economists, and development practitioners worldwide. Financial inclusion aims to provide fair and unrestricted access to financial services, particularly for marginalised populations without traditional banking access. This study investigates how financial inclusion promotes economic growth by empowering individuals and businesses, fostering financial security, and stimulating entrepreneurship, innovation, and investment. Using rigorous analysis methods, the Autoregressive Distributed Lag (ARDL) approach, this study examines the cointegration effect between financial inclusion and economic growth in Malaysia's short- and long-term perspectives. The results indicate a positive impact of financial inclusion on economic growth, mainly through the number of mobile and internet banking transactions (MOBILE), Automatic Teller Machines (ATM), and the number of institutions of commercial banks (ICB). However, compared to other financial inclusion proxies, ICB shows a stronger association with long-term economic growth. Similarly, the initial income (A), trade openness (TRADE), and capital (K) significantly contribute to economic growth in the long run. Interestingly, labour appears to adversely affect economic growth in the long run for both Model 1 and 2. This phenomenon could be attributed to fluctuations in labour market conditions, including changes in workforce skill levels or demographic shifts. The findings underscore the transformative potential of financial inclusion in achieving sustainable development and poverty reduction.

Remittances, Financial Depth and Economic Growth of Malaysia

The objective of this study is to investigate the effects of remittances inflows to Malaysia's economy and does the financial sector development level have influence on remittances impact to economic growth of Malaysia. Time series technique has been adopted to explore long run effect of remittances, financial depth and growth in Malaysia using annual data for the period 1984-2013. The results showed that remittances and financial depth have positive and significant effect on growth in long run. Granger Causality tests are also used to explore the relationship between remittance-growth and financial development-growth. The findings revealed that there is an impact of remittances on economic growth of Malaysia via the influence of the country's financial depth.

THE POTENTIAL OF ISLAMIC CROWDFUNDING TO FINANCE SMALL CONSTRUCTION PROJECTS IN MALAYSIA

In an era marked by a multitude of global challenges, such as geopolitical tensions like the Russia-Ukraine conflict, regional lockdowns affecting key Chinese provinces, and the strict enforcement of monetary policies, all exacerbated by the ongoing COVID-19 pandemic, which has further intensified funding challenges for infrastructure projects, this study delves into the potential of Islamic crowdfunding as a means to finance small-scale construction projects in Malaysia. Utilizing qualitative research and content analysis, this investigation explores the applicability of crowdfunding within Malaysia's construction sector. Data collection involves a comprehensive review of pertinent literature and documents, with thematic analysis revealing crucial insights. The paper introduces a framework that harmonizes crowdfunding principles with Islamic ethical values, aiming to foster inclusive economic growth. This research advocates for collaboration among various stakeholders, including Islamic crowdfunding platforms, construction companies, investors, and regulatory authorities, to harness the potential of Islamic crowdfunding. By doing so, they can contribute to Malaysia's economic growth, social development, and the expansion of ethical finance within the construction industry.

Nexus between Macroeconomic Factors and Economic Growth in Malaysia: An Autoregressive Distributed Lag Approach

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.

Understanding Economic Indicator toward Tourism Sector and Economic Growth in Malaysia

Understanding Economic Indicator toward Tourism Sector and Economic Growth in Malaysia

The Impact of Corruption on Economic Growth in Malaysia

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.

Regulatory Framework on Foreign Direct Investment as a Factor in Determining the Economic Growth in Malaysia Post-Covid-19 Pandemic

A country's economic growth rate is the percentage change in the value of all goods and services produced during a certain period compared to the previous period. Since the Covid-19 pandemic was announced and hurting all businesses, several companies have depended on foreign direct investment (FDI) investment. Hence, this study aims to pinpoint new trends that Malaysian legal investment decision makers should follow to prepare for FDI attractiveness post-Covid-19. This study applies empirical theoretical methods with a qualitative approach to the relationship between state governments and foreign direct investors. The results of the analysis show that many countries that offer FDI face economic deficits and are more willing to develop themselves than others. It was agreed that FDI had a positive impact on Malaysia's economic growth and this growth was faced with shortcuts due to the negative impact of the Covid-19 pandemic. In addition, Malaysia has long-standing political problems which have impacted the country's FDI attractiveness. His contribution is to help these components adopt laws and regulations that are good for the future as the country has been dramatically impacted economically.

TAKAFUL-GROWTH NEXUS BEFORE AND AFTER THE IMPLEMENTATION OF IFSA 2013: EMPIRICAL EVIDENCE FROM MALAYSIA

The expanding Takaful industry, together with the remarkable economic development has drawn attention to explore the impact of Takaful on economic growth, especially in Malaysia as it has been retaining its position as the leader in Islamic finance as well as maintaining its position to be in top for the Global Islamic Economy Indicator (GIEI) Score for the 9th consecutive years. Although many challenges have been faced by Takaful successfully, there are still some issues that need to be improved especially in terms of the legal, supervisory, and institutional framework, and the directions for future research by focusing on statistical analysis and economic significance, and its primary objective to serve the society. Hence, this paper examines the association between the Malaysian Takaful sector and real economic growth pre and post-IFSA 2013 for the period of 2007 – 2019. This study employs both quantitative and qualitative analysis, in which Pearson Correlation Coefficient is adopted for the quantitative analysis, while an interview session with 5 experts is employed for the qualitative analysis. The quantitative findings show that Takaful is positively linked to real economic growth significantly pre-IFSA 2013 but insignificantly post-IFSA 2013, supporting the supply-leading hypothesis. Meanwhile, the qualitative findings suggest that IFSA 2013 does assist the Takaful sector to improve the real economic growth in Malaysia via its rules and regulation, and the Takaful industry has contributed its own humble quota to economic growth by creating jobs the society and adding value to both participants and businesses.

The Impact of Oil Price and Government Expenditure on Economic Growth in Malaysia

ABSTRACT Purpose: This study examines the impacts of oil prices and government expenditure on economic growth in the context of Malaysia. Methodology: The time series monthly data from 2000 to 2021 has been considered for this study and examined by the Auto Regressive Distributed Lag (ARDL) model for short and long-run observations. Findings: The finding reveals that the oil price has a favourable impact on both short- and long-term economic growth; hence, Malaysia is practically an oil exporter. Despite the instability of oil prices, the country generates a significant amount from the sector. As oil price rises, economic activities are eventful. The government allocates more funds to various productive areas of the nation from the oil sector-generated revenue. Government expenditure has a considerable positive effect on economic growth in the short and long run. Practical Implications: The investigation results indicate that oil prices and government expenditure favourably impact Malaysia's economy in the short and long term. Originality/Value: Based on the data, policymakers could re-evaluate government expenditures to lubricate the wheels of economic growth while keeping an eye on the volatility of oil prices, contributing to oil revenues. Keywords: Oil price, government expenditure, economic growth.

Gas Consumption as a Key for Low Carbon State and its Impact on Economic Growth in Malaysia: ARDL Approach

Natural gas consumption contributes the least to CO2 emissions than other non-renewable energy such as oil and coal. Thus, it is important to replace oil in generating economic activities and leading the country towards low carbon state. Despite the environmentally friendly energy, most previous studies did not study gas consumption. Therefore, this study investigates the effects of gas consumption and other selected macroeconomic determinants such as labour, capital, foreign direct investment, trade openness, and financial development on Malaysia's economic growth from 1980 to 2019. The Augmented Distributed Lag (ARDL) approach is employed, and the results show that gas consumption plays a vital role in boosting economic growth in the short and long run. Based on these findings, all economic sectors should consume more natural gas instead of oil, including industries and transportation. This move can conserve the environment and support clean energy for sustainable development. The remaining variables also increased economic growth except for financial development. Based on these outcomes, the country's policymakers can construct a suitable policy that can improve all the potential macroeconomic determinants besides the use of natural gas consumption in accelerating growth in Malaysia.

Predicting Sustainable Development Goals through the Industry 4.0: Insights from Public Listed Companies

In an ideal world, publicly listed companies would be forced to publish a report on the Sustainable Development Goals (SDGs). The abandonment of SDG reporting in annual reports by public corporations is the focus of this study. We noticed in recent years that many companies are unable to recognise and commit to the Sustainable Development Goals (SDGs) in their annual reports. We observed that Malaysia prioritises economic growth above environmental concerns. Malaysia's economic growth and health system have been jeopardised as a result of the current COVID-19 outbreak. It will be difficult to achieve the other sustainable development objectives if there is a significant prevalence of chronic infectious and non-infectious diseases, as well as a lack of physical, mental, and social well-being in society. In this study, a collection of primary data gathered from the Bursa Malaysia will be used for performance analysis and forecasting. The analytical tools used for this inquiry were Power BI and RapidMiner. In the first activity, we discovered that software and services businesses who use IR 4.0 had the best SDG implementation performance. According to the study, there is a significant relationship between organisations' use of IR 4.0 and their efforts to fulfil the SDGs. It will be easier to meet the Sustainable Development Goals with broad IR 4.0 adoption in a company. According to the results of the survey, Selangor is the state with the highest degree of company SDG implementation. In conclusion, predicted data reveal that states and specific SDGs have a substantial influence on corporate adoption of SDGs. Finally, Selangor-based software and service enterprises provide the most contribution to the achievement of the Sustainable Development Goals.