Economic Growth In Malaysia Research Articles

Export Analysis of Major Commodities in Malaysia

This study aims to investigate the factors associated with the commodity export demand and to explore and quantify the contribution of the commodity export to economic growth. The technique of (VECM) Vector Error Correction is applied to estimate the export and economic growth model. It tests whether there has been a long-run relationship between commodity export volume and exogenous variables such as own price, substitute price, exchange rate, world population and industrial production index. The results indicated that there is a long run relationship among variables. The result suggests that exchange rate have a negative impact to the palm oil, rubber and tin where depreciation may reduce export of these commodities. The findings of the research also show that the commodities export has mixed effect on economic growth in Malaysia. Export of petroleum, palm oil and sawlog has a positive and significant relationship with economic growth in the long run while only petroleum and palm oil contributed to the economic growth in the short run. The evidence of impulse response function shows that exchange rate and FDI shock have a relatively higher significant impact on all exports of major commodities and economic growth respectively. This study implies that export of major commodities in Malaysia should be treated as an engine of growth. The effective management of exchange rate and export promotion policies can play a significant role in increasing commodity exports thus will improve Malaysia economic growth.

AN EMPIRICAL ANALYSIS OF EDUCATION EXPENDITURE, HEALTH CARE EXPENDITURE AND ECONOMIC GROWTH IN MALAYSIA

ABSTRACT
 This paper aims to empirically analyze the relationship between the education expenditure, health care expenditure and economic growth in Malaysia over the period of 1980 to 2012. The main interest of this study will be to review and address the mixed results presented by past researches regarding the relationship between education and health care expenditure towards economic growth. The relationship between the variables will be empirically examined for both the short-run and long-run by employing the Johansen Co-integration Technique and Vector Error Correction Model (VECM). The existence of a long run relationship between public education spending, health care expenditure and economic growth was well indicated. It was therefore ascertained that the public spending on education and healthcare sectors are very much a long-run phenomenon as it only generates a return over an extended period of time.

Hydrogen Gas Production from Gasification of Oil Palm Empty Fruit Bunch (EFB) in a Fluidized Bed Reactor

Malaysia is one of the largest producers of palm oil and this industry plays an important role in Malaysia economic growth. As this industry grows larger, a significant amount of oil palm waste is generated, creating the problem of overloading biomass waste. Since the oil palm waste has many significant uses such as empty fruit bunches (EFB), the interest in production of hydrogen gas as the renewable energy from EFB also increases. The most common and favorable thermochemical processes to produce the hydrogen gas is gasification process in fluidized bed reactor. Regardless of tremendous experimental studies done on effectiveness of using EFB for production of hydrogen, the process implementation in industry is still discouraging. This is due to lack of proven technology and high capital cost of investment. In this study, a computational modeling was developed for EFB gasification in fluidized bed gasifier using the ASPEN PLUS simulator (v. 8.8) to optimize the gasification temperature, pressure and to study the different of chemical behavior. The results indicated that increase in temperature will increases the production of hydrogen and enhances carbon conversion efficiency. The optimum temperature and pressure was 850 °C and 1.035 bar respectively. The result shows that the char was removed significantly after several gas cleaning process. The final product for purified hydrogen gas is 14.5 kg/hr which is around 21% of hydrogen yield. Based on the result, it indicates that EFB has a potential to be used as a source of energy in a future.

An Empirical Study of The Cocoa, Rubber and Economic Growth in Malaysia

The Malaysian plantation industry is an integral part of the agricultural sector. Cocoa and rubber products’ trade is very important to the Malaysian economy and the global agricultural industry. The purpose of this study is to evaluate the relationship between cocoa, rubber and economic growth in Malaysia. To examine this linkage, we use time series from 1972 to 2016. Based upon the results we examined for both the short-run and long-run by employing Johansen co-integration and Vector Error Correction Model (VECM). These findings showed that the cocoa and rubber had an impact on the GDP for long run relationship.

Export Development Policy and its Impact on Economic Growth in Malaysia Period (1990 - 2014)

Economic growth is one of the most important indicators of the well-being and prosperity of society. Foreign trade plays an active role in various fields and exports play a fundamental role as an engine of economic growth. Exports are therefore important in foreign trade because they play an important role in the competitiveness of international markets. Asian countries began implementing a new strategy after the economic crises (1997, 2001 and 2008), including Malaysia, which depends on reducing the role of the public sector in the management of development processes and introducing structural changes in accelerating economic growth and not relying on a specific type of exports modern and sophisticated. The research aims to identify the impact of export development on economic growth in Malaysia for the period 1990-2014. The hypothesis of research is that the development of exports has positive effects on economic growth in the long run based on a set of policies and mechanisms to implement them. Data from official sources and Internet sites, as well as using the theoretical and quantitative method of analysis to arrive at a set of results and proposals.

Employability Skills Model for Engineering Technology Students

The increasing unemployment rate among youth has affected Malaysian economic growth. This youth with tertiary education were the highest to be unemployed due to lack of experience, lack of labor market information and poor employability skills such as communication. Hence, TVET has become vital field in offering solution to the employability issue. This study aims to develop a prediction model in order to estimate the probability of obtaining high-level employability skills among engineering technology students in one of the technical institutes in Malaysia. A multinomial logistic regression analysis was implemented for this purpose. Through this prediction model, factors that contribute mostly to the high-level employability skills were identified. Using a random sampling technique, 204 engineering technology students from nine technical institutes were chosen to be the respondents of the study. A set of Students' Employability Skills Questionnaire of eleven items that include of Communication (3 items), Problem Solving (3 items), Teamwork (4 items), Planning and organizing (3 items), Creativity or Innovation (3 items), Working with others (3 items), Independent Study (3 items), Numeracy skills (2 items), ICT Skills (3 items), Self-Management (2 items) and Time management (3 items) was distributed. The collected data were analysed using SPSS version 22 in order to obtain multinomial logistic regression output. The result may be utilized by the technical institutes to predict the level of employability skills among engineering technology students for future employment in the job market. This implies a practical alternative for the similar issues among TVET graduates. The identification of lacking factors through the predictive model can be used in preparing the invention programs in order to reduce the unemployment rate among engineering technology graduates who become the job feeder in TVET area. Besides that, the contribution of this study is to fill the gap of the limitation study among TVET graduates as well.

Food security and socio-economic aspects of agricultural input subsidies

ABSTRACTThis study is the first attempt at promoting agricultural input subsidy policies in a computable general equilibrium framework on two main dimensions of food security (i.e. food availability and access to food), poverty and income distribution in Malaysia for all ethnic groups. This study investigates the short-run impacts of two subsidy removal policy and one subsidy expansion policy using 2010 input–output table. Results show that both subsidy removal policies negatively influence agricultural sectors and economic growth of Malaysia while the expansion policy influence them positively. The removal policies also decrease food availability and access to food and, consequently, increase poverty at the national level and the poverty level of Malay household, while the expansion policy increases food availability and access to food and alleviate the poverty level of Malay household. The complete removal policy without paddy/rice subsidies increases rice production and raises food availability and access to food commodities (or food security) in the country resulting in a lesser increase in poverty compared to the complete removal policy.

Islamic stock market and sukuk market development, economic growth, and trade openness (the case of Indonesia and Malaysia)

This study was conducted in order to analyse the two-way relationship between the Islamic stock market and sukuk market development, and economic growth. this study also analyses whether trade openness influences the development of the Islamic stock market and sukuk market, and economic growth. VAR (Vector Auto Regressive), VECM (Vector Error Correction Model), and a Granger Causality Test used to test the hypothesis. Using Indonesia and Malaysia as the sample countries and from February 2008 to December 2017 period, the results showed that there is a bi-directional causality between the development of the Islamic stock market and the development of the sukuk market in Indonesia and Malaysia. There is a bi-directional causality between the development of the Islamic stock market and sukuk market with economic growth in Indonesia. Unidirectional causality is found between economic growth and the sukuk market development in Malaysia. And no causality (neutrality) is reported between the development of the Islamic stock market and economic growth in Malaysia. Meanwhile, trade openness has a significant and positive effect on the sukuk market development as well as economic growth in Malaysia. For the limitations, this research only focused on two countries and only delved into the corporation sukuk market.

Natural disasters and Malaysian economic growth: policy reforms for disasters management.

The natural catastrophic events largely damage the country's sustainability agenda through massive human fatalities and infrastructure destruction. Although it is partially supported the economic growth through the channel of "Schumpeter creative destruction" hypothesis, however, it may not be sustained in the long-run. This study examined the long-run and causal relationships between natural disasters (i.e., floods, storm, and epidemic) and per capita income by controlling FDI inflows and foreign aid in the context of Malaysia, during the period of 1965-2016. The study employed time series cointegration technique, i.e., autoregressive distributed lag (ARDL)-bounds testing approach for robust inferences. The results show that flood, storm, and epidemic disasters substantially decrease the country's per capita income, while FDI inflows and foreign aid largely supported the country's economic growth in the short-run. These results are disappeared in the long-run, where flood and storm disasters exhibit the positive association with the economic growth to support the Schumpeter creative destruction hypothesis. The foreign aid decreases the per capita income and does not maintain the "aid-effectiveness" hypotheses in a given country. The causality estimates confirmed the disaster-led growth hypothesis, as the causality estimates running from (i) storm to per capita income, (ii) epidemic to per capita income, and (iii) storm to foreign aid. The results emphasized for making disaster action plans to reduce human fatalities and infrastructure for sustainable development.

Nexus Between Financial Development and Economic Growth in Malaysia

Financial development is the key for economy evolution as financial intermediaries could foster productivity growth and capital accumulation which lead to the economic growth. The nexus between financial and economic growth is an issue that has long been debated. On the one hand, a stream of literatures offer support to the contention on the running causality from financial development towards economic growth while on the other hand, economic variables are found to foster the financial institutions. Therefore, this study aims to investigate the relationship between financial development and economic growth in Malaysia over the period of 1990 to 2013. The research methods adopted are Johansen cointegration test to check the existence of short term and long term relationship between variables used and Granger causality test to determine the relationship direction for the different variables used. The study finds evidence of a long-run relationship between financial development and economic growth, amid a running causality between economic growth to all indicators of financial development in Malaysia with the exception of financial system deposit. The results imply economic growth can be further developed as it stimulates the development of financial indicators

Effect of International Trade to Economic Growth in Malaysia

The main purpose of this study is to examine the dynamic relationship between various variables in the system of equations formed in the long-term and short-term on economic growth. This empirical study utilizing the multivariate approach which includes Johansen Juselius and Vector Error Correction Model (VECM). Through the econometric method used, this study is able to detect the existence of long-term and short-term relationship and the strength of each variable can be identified. The empirical study has proven that international trade plays an important role in generating economic growth where Gross Domestic Product (GDP) acts as an endogenous variable in the long-term system of equations for both models, Model 1 - Export and Model 2 - Import. In addition, the effect of interaction variables in both models which is X_REER (ECT = 0.005041) in Model 1 - Export and M_REER (ECT = 0.011019) in Model 2 – Import were positive and significant. Besides, the results showed bidirectional causality between interaction variables and economic growth in the long-term and also in the short-term. This means international trade is very sensitive to changes in exchange rate. However, because international trade is a major source of national income, any shocks in exchange rate still can be overcome by involving the interaction variable. Hence, the influence of interaction variables between international trade which is export and import with the exchange rate should be taken simultaneously in the implementation of policies to generate more rapid economic growth in the future.

Fiscal Decentralisation and Economic Growth in Malaysia: A Market Preserving Federalism Perspective

By using fiscal datasets from 1990 to 2010 in Malaysia, a panel Dynamic-OLS (DOLS) is employed to investigate the extent to which fiscal decentralisation can support state level economic growth as proposed in the Market preserving federalism (MPF) theory. Despite having a more centralised federalism system, the result strongly shows that a fiscal decentralisation variable, (i.e. a composite ratio of decentralisation) has significant coefficient and positive relationship with state economic growth. This implies that a certain degree of fiscal decentralisation in Malaysia is able to contribute to states’ economic performance by adopting fiscal decentralisation simultaneously on both dimensions of revenue and expenditure. This validates the view that decentralisation is a multi dimentional measure. The study shows that Malaysia also would be able to benefit from a system of federalism which empowers state governments to make policies for their jurisdictions and to compete with one another for better services and higher investment. Hence, competition is the mechanism that creates incentives that result from satisfying the MPF conditions and subsequently leading to the achievement of higher state economic performance.

Validating the dynamic relationship between technological innovation and economic growth in Malaysia

Technological innovation is a dynamic growth factor to achieve sustainable development. This study aims to explore the long- and short-run relationship between technological innovation and Malaysia's sustainable growth from 1980 to 2015. Augmented Cobb-Douglas production function is used to scale the technological innovation and economic growth link. The F-bounds test and VECM Granger causality are employed. The dynamic relationships among the gross domestic product, capital, employment, electricity consumption, technological innovation, technological innovation squared and governance institution quality variables; and the nonlinear relationship between technological innovation and economic growth are studied. The study confirms the existence of long-run relationship among the variables and the link between technological innovation and economic growth has an inverted U-shape. Also, technological innovation, technological innovation squared, and governance institution quality Granger-cause economic growth in the long and short run, together with capital, employment and electricity consumption. Therefore, continuous plans and policies are very much needed to drive technological innovation evolution in Malaysia, so the tide is slowly turning.

Economic progression of ASEAN - a comparative analysis of selected ASEAN economies

This study investigates the association of macroeconomic variables with economic growth of ASEAN-5 (Indonesia, Malaysia, Singapore, Thailand and Philippines) using annual time series data over the period of 1971 to 2017. We applied Johansen co-integration and vector error correction framework to investigate the impact of energy use, trade openness, financial and infrastructure development on growth. Our empirical evidence validates energy lead growth hypothesis in all five economies. Infrastructure development impacts economic growth positively in all countries excluding Malaysia in the long-run. The impact of financial development on economic growth of Singapore was relatively greater than the rest of the ASEAN-5 countries. The association of trade openness was positive with the economic growth of Malaysia, Singapore, Philippines, and Thailand in the long-run. The maximum speed of adjustment to long-run equilibrium was recorded for Thailand.

Energy consumption, CO<SUB align="right">2 emission and economic growth: empirical evidence for Malaysia

This study focuses on the relationship among the energy consumption, carbon emission and economic growth of Malaysia by using a time series data from 1980-2016. The study findings are shown by an econometric analysis that energy consumption, total and per capita CO2 emission and gross domestic product (GDP) has increased vastly between 1980 and 2016. The Johansen cointegration test confirms the existence of the long run relationship of energy consumption with carbon emission and economic growth. Moreover, the Granger causality test reveals the unidirectional causality of energy demand and population with carbon emission. The positive and significant relationship between GDP and carbon emission is a critical issue in Malaysia that needs to be addressed with care as economic growth is necessary but increase of carbon emission is undesirable. Therefore, this study recommends to promote green energy, green growth (GDP) that will ensure both energy security and energy sustainability in Malaysia over time.

Contribution of Islamic Social Capital on Green Economic Growth in Malaysia

This paper studies the relationship between social capital on the green growth in Malaysia, with the aim of ascertaining whether faith based social capital has a role in sustaining economic growth. The study utilizes the annual data over the period of 1970-2015. This study employs the Auto-regressive Distributed Lag (ARDL) model and causality using the Vector Error Correction Model (VECM). The findings demonstrate the long and short-run associations between social capital and green growth in Malaysia. The causality only runs in a uni-direction from social capital to the green economic growth. The findings have important policy implications for green economic growth measurement to account for social well-being and to fulfill the objectives of Islamic Sharia.

Validating the dynamic relationship between technological innovation and economic growth in Malaysia

Technological innovation is a dynamic growth factor to achieve sustainable development. This study aims to explore the long- and short-run relationship between technological innovation and Malaysia's sustainable growth from 1980 to 2015. Augmented Cobb-Douglas production function is used to scale the technological innovation and economic growth link. The F-bounds test and VECM Granger causality are employed. The dynamic relationships among the gross domestic product, capital, employment, electricity consumption, technological innovation, technological innovation squared and governance institution quality variables; and the nonlinear relationship between technological innovation and economic growth are studied. The study confirms the existence of long-run relationship among the variables and the link between technological innovation and economic growth has an inverted U-shape. Also, technological innovation, technological innovation squared, and governance institution quality Granger-cause economic growth in the long and short run, together with capital, employment and electricity consumption. Therefore, continuous plans and policies are very much needed to drive technological innovation evolution in Malaysia, so the tide is slowly turning.

The theory of planned behaviour and transformational leadership: an examination of corporate philanthropy among SMEs in Malaysia

A wide body of knowledge concerning CSR has been acquired by integrating this strategy as the corporate strategy in large-scale organisations. However, CSR in SMEs has received relatively little attention despite their important role and contribution in building a nation. The data for Malaysia highlight that small and medium enterprises (SMEs) are the main driver of Malaysia's economic growth. Therefore, this study examines the determinants of the corporate philanthropic decisions of SMEs by mapping it to Ajzen's theory of planned behaviour (TPB) and Bass's transformational leadership theory. Moral obligation and government incentives are also included to provide better understanding of the research. The study was carried out using 82 questionnaires answered by the top management of SMEs. Overall, this study offers new understanding concerning the determinant factors for the engagement of SMEs in corporate philanthropy. This paper also discussed the suggestions for future study as well as the limitations.

The theory of planned behaviour and transformational leadership: an examination of corporate philanthropy among SMEs in Malaysia

A wide body of knowledge concerning CSR has been acquired by integrating this strategy as the corporate strategy in large-scale organisations. However, CSR in SMEs has received relatively little attention despite their important role and contribution in building a nation. The data for Malaysia highlight that small and medium enterprises (SMEs) are the main driver of Malaysia's economic growth. Therefore, this study examines the determinants of the corporate philanthropic decisions of SMEs by mapping it to Ajzen's theory of planned behaviour (TPB) and Bass's transformational leadership theory. Moral obligation and government incentives are also included to provide better understanding of the research. The study was carried out using 82 questionnaires answered by the top management of SMEs. Overall, this study offers new understanding concerning the determinant factors for the engagement of SMEs in corporate philanthropy. This paper also discussed the suggestions for future study as well as the limitations.

Economic liberalisation and Malaysian economic growth: the convergence club of Malaysia and ASEAN

Economic liberalisation and Malaysian economic growth: the convergence club of Malaysia and ASEAN