Crime and Income Inequality: The Case of Malaysia

This paper examines the causality between income inequality and crime in Malaysia for the period 1973-2003. Autoregressive Distributed Lag (ARDL) bounds testing procedure is employed to (1) analyze the impact of income inequality on various categories of criminal activities as well as to (2) analyze the impact of various categories of criminal activities on income inequality. Interestingly our results indicate that income inequality has no meaningful relationship with any of the various categories of crime selected, such as total crime, violent crime, property crime, theft and burglary. Crime exhibits neither long-run nor short run relationships with income inequality and they are not cointegrated. It cannot be denied that there is ambiguity in the empirical studies of crime economics regarding various income variables leading to often mixed and contradicting results, which might be a good explanation of this finding.Income inequality; crime; bounds testing; Malaysia

Is crime cointegrated with income and unemployment?: A panel data analysis on selected European countries

This paper examines the causality between income, unemployment and crime in 11 European countries employing the panel data analysis for the period 1993-2001 for both aggregated (total crime) and disaggregated (subcategories) crime data. Fixed and random effect models are estimated to analyze the impact of income and unemployment on total crime and various disaggregated categories of criminal activities. Hypothesis tests show that random effect model should be used for all (namely total crime, motor vehicle crime, domestic burglary, and violent crime) except for drug trafficking. Our results indicate that both income and unemployment have meaningful relationship with both aggregated and disaggregated crime. Crime exhibits positive significant relationship with income for all the categories except for domestic burglary, whereby it is significantly negative relationship. Crime also shows positive significant relationship with unemployment except for violent crime, whereby it is significantly negative relationship. The results also show strong country specific effect in determining the crime level.income; unemployment; crime; Europe; panel data analysis

Testing for Service-Led and Investment-Led Hypothesis: Evidence from ‘Chindia’

This study examines the meaningful relationship between economic growth, and service sector contribution and domestic investment in two major Asian economies, namely India and China. Autoregressive Distributed Lag (ARDL) bounds testing procedure is employed to analyze the impact of the selected variables namely (1) contribution by the service sector, (2) (4) domestic investment on economic growth and vice versa. The period of interest is 1960-2005 using annual data. The empirical results demonstrate that for the case of India, there is (1) a unidirectional causality from domestic investment to economic growth and (2) from economic growth to services. As for China, only unidirectional causality from services sector to economic growth is detected, while no meaningful relationship was found between domestic investment and economic growth.Service-led; investment-led; growth; China; India

Crime and economic conditions in Malaysia: An ARDL Bounds Testing Approach

Economists recognized that economic conditions have an impact on crime activities. In this study we employed the Autoregressive Distributed Lag (ARDL) bounds testing procedure to analyze the impact of economic conditions on various categories of criminal activities in Malaysia for the period 1973-2003. Real gross national product was used as proxy for economic conditions in Malaysia. Our results indicate that murder, armed robbery, rape, assault, daylight burglary and motorcycle theft exhibit long-run relationships with economic conditions, and the causal effect in all cases runs from economic conditions to crime rates and not vice versa. In the long-run, strong economic performances have a positive impact on murder, rape, assault, daylight burglary and motorcycle theft, while on the other hand, economic conditions have negative impact on armed robbery.Bounds Testing; Malaysia; Crime

Military and Economic Growth in ASEAN-5 Countries

In this study we employ the bounds testing procedure suggested by Pesaran (2001) and dynamic OLS (DOLS) proposed by Stock and Watson (1993) to test the robustness of the causal effect and long-run relationships between military expenditure and economic growth in ASEAN-5 countries from the year 1965 to 2006. Generally, our results suggest that: (1) there are only three (Indonesia, Thailand, Singapore) out of five countries analyzed exhibit long–run relationship between military expenditure and economic growth; (2) While for the case of Singapore, the causality is bidirectional, for Indonesia and Thailand it is unidirectional from military expenditure to economic growth; and (3) For the remaining countries, (Malaysia and Philippines), no meaningful relationship could be detected. The results are robust, producing similar results employing both ARDL and DOLS.military expenditure; economic growth; Asean-5

Defense and Inequality: Evidence from Selected ASIAN Countries

This paper examines the causality between military expenditure and income inequality in selected Asian countries namely Malaysia, Indonesia, Singapore, Philippines, India and South Korea for the period 1970-2005. Autoregressive Distributed Lag (ARDL) bounds testing procedure is employed to (1) analyze the impact of military expenditure on income inequality and (2) the impact of income inequality on military expenditure as well. Interestingly our results indicate one way causality running from military expenditure to income inequality only for the case of Malaysia and bidirectional causality for the case of Singapore. As for the remaining countries, no meaningful relationship could be detected and it can be seen as sign of good governance in these countries.defense spending; ARDL; Income Inequality

Pre and post crisis analysis of stock price and exchange rate: Evidence from Malaysia

The furore and chaos created by the Asian financial crisis have ignited many studies on numerous subjects, and it is believed that the crisis has changed the way nations being administered and policies formed and implemented especially those regarding monetary and fiscal policies. Johansen (1991) cointegration method was used and the period was divided into two sub periods, albeit pre crisis and post crisis. The results obtained are similar with a number of past literatures pointing to no long run relationship between stock price and exchange rate for both periods.Stock price, exchange rate, Asian financial crisis, Cointegration

Defense, Education and Health Expenditures in Selected Asian Countries

This study explores the inter-relationship between military expenditure, education expenditure and health expenditure in eight selected Asian countries namely Malaysia, Indonesia, Singapore, Philippines, Bangladesh, Nepal, Sri Lanka and South Korea. Autoregressive Distributed Lag-Restricted Error Correction Model (ARDL-RECM) procedure was utilized in the analysis. The empirical results suggest that, except for the case of Malaysia and Sri Lanka, whereby no meaningful interrelationship was detected between these three variables, the results for the rest of the countries are mixed, with differing granger causality being detected among these variables. The mixed results obtained in this study is an indicator of differing policy being implemented and will result in varying implication. Generally the error correction term is significant. Implying there is long-run relationship between defense spending, education and health expenditure.defense spending; health expenditure; education

Effect of mergerson efficiency and productivity: Some evidence for banks in Malaysia

This study is undertaken to investigate the extent to which mergers lead to efficiency by which services are provided to the public and the productivity of Malaysia’s banking institutions sector. The data cover the period 1993 to 2004, which includes the pre-merger years and the post-merger years. This study attempts to evaluate technical efficiency, efficiency change, technical change and productivity of commercial banks, finance companies and merchant banks using a non-parametric Data Envelopment Analysis (DEA) and Malmquist Index approach as the framework for the analyses. It is found that: (1) that on average, productivity across banking institutions increased at annual rate of 5.8% over the study period 1993 to 2004; (2) the results also indicated that almost all of the productivity growth comes from technical change (or innovations in banking technology) rather than improvement in efficiency change, which contributes for 6.1% of productivity growth, while the latter accounted for 0.2% decline; (3) the merger process led to productivity improvements whereby, it is observed that the productivity of Malaysia’s banking sector has been improved (in terms of efficiency) after the implementation of merger program for domestic banking institutions in 1999. This might be due to the utilization of their scale economies to improve their efficiencies. However, the productivity of banking institutions has been affected by certain economic conditions in year 2001 and 2004 (such as the September 11 tragedy and the process of capital rationalization that merged entities have undergone).Banking sector, Mergers, DEA and Malmquist index,Malaysia

The relationship between trade openness, foreign direct investment and growth: Case of Malaysia

This study examines the role of trade openness and foreign direct investment in influencing economic growth in Malaysia during 1975-2005, using the Bounds testing approach suggested by Pesaran et al. (2001). The empirical results demonstrate that trade openness is positively associated and statistically significant determinant of growth, both in short run and the long run. The result also suggested that foreign direct investment is positively associated in the short run and negatively associated in the long run, both significantly. Besides these two variables, the other control variable namely exchange rate is also significant in the short run as well as in the long run.trade openness; foreign direct investment; economic growth; Malaysia