The Future of Malaysia Trade in One Belt One Road

The One Belt and One Road Initiative (OBOR) will open up more trade opportunities for Malaysia due to the two trade routes, namely, the land-based Silk Road Economic Belt and the seagoing 21st Century Maritime Silk Road. This paper empirically examines the short-term and long-term relationship between Malaysias trade balance, real exchange rates (RER), industry production index (IPI), Malaysias consumer price index (MCPI) and Chinas consumer price index (CCPI) for the period January 2000 to September 2017. The Malaysias trade balance is regarded as an explained variable while the MYR-RMB, IPI, MCPI and CCPI will be regarded as explanatory variables. The Autoregressive Distributed Lag (ARDL) cointegration test is employed to estimate the long-run relationship between China and Malaysia. Then the Error-Correction model and the error correction term would explain the speed of adjustment in restoring equilibrium in the dynamic model referred to in this paper. The finding shows that the exports in Malaysia would benefit from the real appreciation of MYR and Chinas inflation. The OBOR will open up more opportunities for Malaysia to generate trade mainly because it involves the belt and the maritime but diplomatic relationship and export constructive policy also important to improve Malaysia trade balance with Chin

Efficiency, firm-specific and corporate governance factors of the Takaful insurance

Purpose: Malaysia is recognised as an emerging country with a large Muslim population, making the Malaysian Takaful industry the largest Takaful market in the Southeast Asia region and, notably, one of the fastest growing markets globally. Malaysia is also the first country globally to implement a risk-based capital framework for Takaful. Therefore, the purpose of this paper is to identify the factors that influence the efficiency level (cost efficiency and technical efficiency) of the Takaful industry and to examine the effects of Takaful insurance firms’ specific factors and corporate governance factors that influence the efficiency of Takaful insurance in Malaysia. Design/methodology/approach: In this paper, the efficiency level of the Malaysian Takaful industry was examined between 2011 and 2015. The sample consisted of 11 family Takaful and 8 general Takaful operators. Two-stage Data Envelopment Analysis (DEA) was used by first, conducting non-parametric frontier data envelopment analysis to obtain a DEA score for each operator. This was followed by panel regression with the DEA scores as the dependent variable and the insurance firms’ specific factors and corporate governance factors as the independent variables. Findings: The results of DEA indicate that Takaful operators in general have allocative inefficiency but family Takaful is more cost efficient than general Takaful. Results of panel data analysis reveal that corporate governance factors do influence the cost efficiency but find no evidence on the firm-specific factors towards the cost efficiency and technical efficiency on Takaful operators. Board size and the proportion of non-executive directors impose a negative and significant relationship with cost efficiency, while proportion of Muslim directors in the board is not significant. Research limitations/implications: This paper focused solely on Malaysia which uses strict regulations governing the Takaful insurance market. Due diligence was also performed to minimise any limitation in the paper. It is proposed that future studies should examine this issue in greater detail by incorporating more data from other Muslim countries. Practical implications: The findings of this paper have significant implications for policymakers to understand the efficiency condition in the Takaful market. Takaful operators should maintain a small board size with a higher proportion of executive directors, given they could improve the level of effective decision-making to enhance the cost efficiency. As corporate governance factors are significant, Takaful operators in Malaysia should also undertake transparent disclosure practice and reporting such as providing adequate and relevant information related to Shariah compliance and principles to provide a robust foundation as the Takaful market leader regarding Takaful regulations globally. Social implications: The consumer is able to make a better decision when choosing Takaful insurance company to protect their interests. Originality/value: No similar paper has been undertaken to the best of the researcher’s knowledge using similar research design and scope to investigate the efficiency of Takaful insurance as in this paper. Takaful insurance is a rapidly growing industry in Malaysia, setting a prime example to other countries globally. Malaysia was selected for this study, as it is the only nation that has implemented the most extreme regulation in the Takaful insurance market

Impacts of Lower and Upper Secondary Vocational Education on Economic Growth

The recent global financial crisis has called for improvement on the intensity of economic challenges such as skill shortage to strengthen global economies. Vocational education and training (VET) is one of the education systems that is important for improving workers’ and firms’ efficiency, productivity and competitiveness. In view of the contribution of VET in addressing labour market imbalances, it is crucial to understand that impacts of the VET on economic growth. Therefore, this study examines the impacts of lower and upper secondary VET on economic growth in 92 countries from year 2000 to 2016 by using panel regression model. The results indicate that upper secondary VET is significantly and positively influence economic growth but lower secondary VET does not affect economic growth. The study further examines the impacts of lower and upper secondary VET on the economic output indicator below and above median groups, respectively. It indicates that the effect of upper secondary VET on economic growth is stronger in the economic output indicator below median group compared to whole sample.  The implications from this study are that upper secondary VET does matter for economic growth and it is more important to the countries below median group. Therefore, policymakers need to emphasize on upper secondary VET to enhance the contribution of national investment in VET to improve economic growth

Online marketing : a boon or bane for businesses?

A study on the differences between online marketing and traditional marketing methods. An analysis of whether the online avenue is replacing traditional methods, and the possibility of MNCs using it solely as a marketing strategy. Future growth of online marketing and its impact on businesses will be examined

Does equity or bond offerings in Malaysia matter to share price performance?

This study examines the stock price reaction to the announcement of equity or bond issuance in Malaysia (2001 to 2011). Results reveal significant effect of equity issuance on the share price but insignificant effect of bond issuance on the share price. It suggests that the announcement of equity issuance conveys positive news to the investors as they perceive that the company requires more capital to finance the new huge project which could result in higher positive net present value. This result proposes to a large extend that equity market in Malaysia is semi-strong form efficient market hypothesis, there should be more prudent policies by the regulator to ensure the transparency in Malaysia’s equity market. This research also analyses the relationship between CAR with run up, issue size, leverage and financial slack. However, there is insignificant effect with the model inclusive of run up, issue size, leverage and financial slack towards CAR on equity or bond announcement

Does recomposed institutions quality alleviate extreme income inequality?

This paper aims to study the effect of recomposed institution quality to extreme income inequality. Findings reveal aggregated institutional quality of World Governance Indicators (WGI) have anomalies, distorted by its individual components’ incongruent relationships with income inequality. The study covers period from 2010 to 2017 and applies quantile regression method due to rejection of normality of residuals and present of data clustering. Total of 43 countries are selected based on availability of data. WGIs do not always have negative relationship with income inequality. The recomposed WGI-plus and WGI-minus are all significant at correct sign, except insignificant for one case. These findings contribute six implications. Firstly, the WGI has subconsciously set democracy and free market as “good quality” institution, yet findings of positive relationship reveal this is not completely true. Secondly, the positive findings in control of corruption signal possible serious structural flaws regarding policies, perception, and its conceptualization. Thirdly, middle-income countries have relatively more anomalies. Fourthly, relatively more insignificant results of certain WGI components in middle-income countries cast doubt on their system of separation of power, prompting critical review of political will and governance effectiveness towards inclusiveness. Fifth, the significant results of the recomposed WGI enhance call for not aggregating all components of institution quality in future research and policy making decision. Sixth, the classic school that propagated free market is not effective to reduce inequality. Keynesian economies, especially targeted fiscal expenditure helps in middle-income but not high-income counties

Does government and institution quality matter to sustainable development goals?

The world needs to be more resolute to meet its pledge to achieve the United Nations Sustainable Development Goals by 2030, yet three issues remain. Firstly, the representation of sustainable development is often not the SDG. Secondly, the determinants of sustainable development are not conclusive. Thirdly, there are incongruent relationships within components of institutional quality, thus casting scepticism on the validity of the aggregated relationship. This paper aims to analyse factors affecting the achievement of the Sustainable Development Goals Index (SDGI) through a novel attempt based on the recomposed institutional quality. In high-income countries, the most important determinants of sustainable development come from higher capital investment, higher government fiscal expansion, and upholding democracy. In middle-income countries, government effectiveness is the most important determinant of sustainable development. In low-income countries, government plays a vital role through fiscal expenditure and good institutional quality but provided the sustainable development level is high”anomalies results in control of corruption, government ineffectiveness, and voice and accountability prompt for attention