The sources of export competitiveness: the case of Malaysia estate natural rubber sector, 1997-1990

The inherent limitation of the Constant Market Share (CMS) approach in analysing relative export competitiveness is recognised. This paper instead explains export competitiveness in terms of four industry characteristics namely, investment in R&D, and measures of labour, physical and human capital intensities. The analysis leads to two policy conclusions. First, the critical role of labour in Natural Rubber(NR) cultivation and extraction and the urgent need for the development of labour saving technologies. Second, the marginal return of R&D to a matured industry suggests great potential in the export of R&D stock to rapidly growing low cost NR producing countries

Global Economic Crisis: Impact on Higher Education in Malaysia

The global economy is reeling from the effects of financial crisis which led to an economic crisis triggered by the United States sub-prime mortgage crisis which started in late 2007. The sharp inflation in petroleum and food prices in the first half of 2008 also compounded the problem. The National Bureau of Economic Research (NBER) had declared that the US economy had been in recession since December 2007. Contraction in the growth rates of major developed economies thereby causing global trade in goods and services to plummet has affected open economies including Malaysia. Last year Malaysian GDP grew by about 4.6% over 2007. An ominous sign that economic growth in 2009 would be low or even negative was the 0.1% growth in GDP in the fourth quarter of 2008 compared to the same quarter in 2007. This was due mainly to a 40% drop in net exports. The slow down in growth has affected all sectors of the economy. Education in general and higher education in particular are not spared. Higher education has to compete for scarce public funds. The main objective of this paper is to understand the impact of the global economic crisis on higher education in Malaysia. A better understanding is imperative in order to prepare for the challenges ahead. The challenges ahead are within the framework of the new economic model being formulated by the government in order to lift Malaysia into a high income country within a decade. A major critical success factor is the implementation of an effective human capital development strategy.   Keywords: Economic crisis; higher education; recession

Impact of biodiesel blend mandate (810) on the Malaysian Palm Oil Industry

Over the last ten years biofuels production has increased dramatically. One of the main factors is the rise in world oil prices, coupledwith heightened interest in tlle abatetnent ofgreenhouse gas emissions and concerns about energt security. The increment in production has been driven by governmental interventions. In the US, the worldb largestfuel ethanol producer, strongfinancial incentives are guaranteedfor biofuel manufacturers. While, in the European (Jnion, the worldb largest biodiesel producer, biofuel consumption is mostly driven by blending mandates in both France and Germany. In the case of Malaysia, biodiesel started to be exported since 2006. The policy mandate of B5 blend of palm oil based biodiesel into diesel in all government vehicles was implemented in February 2009. h is expected that the blend of 85 will be increased to B l0 in future. This paper seeles to examine the impact of B l0 on the Malaysian palm oil market. A structural econometric model consisting of eight structural equations and four identities was proposed in this study. The model has been estimated by two stdge least squares method using annual data for the period 1976- 201 l. The specification ofthe structural model is based on a series ofassumptions about general economic conditions, agricultural policies and technological change. The study indicates that counterfactual simulation ofan increasefrom 85 to B l0 predicts a positive increase (23.31 per cent) in palm oil domestic consumption, 109.3 per cent decrease in stock, 0.07 per cent increase in domestic price of palm oil and a marginal (0.05 percent) increase in production. An increase in domestic demand would make Malaysia more competitive regionally and globally with benefits accruing to all Malaysians

On The J-Curve Theory: The Literature and Further Proposed Improvements

As one of the most debated topics in international trade, the J-Curve theory has undergone several stages of improvement. This paper tracks those stages consecutively by evaluating the state of the literature. Previous literature and studies on the exchange rate movements on the J-Curve theory to achieved understanding of the effects of exchange rate movements on trade balance substantially which undergone several stages of improvement was gathered within period of 1973 – 2013. The study highlights the need for comprehensive studies assessing the overall effect of exchange rate depreciation on trade balance for one country and all of its major trade partners discretely on disaggregated level, i.e. the sector or commodity-level of trade. Although time-consuming and vast, this could be the only way for a country to draw a full picture for the impacts of its monetary policy on trade balance

Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach

The European Union (EU) Renewable Energy Directive set a target of 20 % share of energy from the renewable sources and 10% share of renewable energy specifically in the transport sector.This has resulted in some countries looking for bio-based alternative energies which lead to the increase in demand for bio-based feedstocks such as palm and rapeseed oil (for biodiesel) and sugar cane and corn (for ethanol).One of the new elements in the palm oil market is the growing demand for this commodity as a feedstock to biodiesel production.This will also put Malaysia in a better light on the international front for taking the effort to reduce carbon emissions.In line with this, the palm oil sector in Malaysia will be able to match the New Economic Model’s (NEM) major goals of high income, sustainability and inclusiveness.This new development is affecting the dynamics of the market, in particular, the supply and demand sectors of this commodity.This paper seeks to examine the impact of biodiesel demand on the Malaysian palm oil industry.This paper proposes a structural econometric model consisting of nine structural equations and four identities.The model has been estimated by the two stage least squares method using annual data for the period 1976–2010.The specification of the structural model is based on a series of assumptions about general economic conditions, agricultural policies and technological change.The study indicates that counterfactual simulation of a sustained 30% increase in biodiesel demand predicts a positive increase (2.48%) in palm oil exports for non-biodiesel, 13% increase in the domestic price of palm oil and a marginal increase in production.An increase in export demand would make Malaysia more competitive regionally and globally with benefits accruing to all Malaysians.Apart from this, the biodiesel demand income is also sustainable and will position the nation on the right path towards a high income country by 202

Impact of Biodiesel Demand on the Malaysian Palm Oil Industry: A Simultaneous Equations Approach

The European Union (EU) Renewable Energy Directive set a target of 20 % share of energy from the renewable sources and 10% share of renewable energy specifically in the transport sector. This has resulted in some countries looking for bio-based alternative energies which lead to the increase in demand for bio-based feedstocks such as palm and rapeseed oil (for biodiesel) and sugar cane and corn (for ethanol). One of the new elements in the palm oil market is the growing demand for this commodity as a feedstock to biodiesel production. This will also put Malaysia in a better light on the international front for taking the effort to reduce carbon emissions. In line with this, the palm oil sector in Malaysia will be able to match the New Economic Model’s (NEM) major goals of high income, sustainability and inclusiveness. This new development is affecting the dynamics of the market, in particular, the supply and demand sectors of this commodity. This paper seeks to examine the impact of biodiesel demand on the Malaysian palm oil industry. This paper proposes a structural econometric model consisting of nine structural equations and four identities. The model has been estimated by the two stage least squares method using annual data for the period 1976–2010.

A demand equation for West Malaysian imports

This paper reports an econometric study of a import function for West Malaysia using time-series data for the period 1960-1974. The theoretical basis of the investigation is a postulated behavioural relationship between the quantity of imports of goods and services and several explanatory variables namely relative prices, lagged imports and gross national product. The results from the most preferred regression equation show that the coefficients for the relative price variable and income variable (represented by gross national product) are significant at the one percent level. However the coefficient for lagged imports is insignificant. Its insignificance is due to the problem of multicollinearity. Finally, the income elasticity of demand for imports is found to be approximately 0.7 implying that import demand is income inelastic. The price elasticity of demand for imports is found to be approximately 0.8

Cointegration between palm oil price and soybean oil price: A study on market integration

The main objective of the paper is to present a cointegration approach to ascertain whether there exists a long run relationship between palm oil price and soybean oil price. A related objective is to investigate causality patterns between the two price series using the Granger causality test. The study establish that the time series on palm oil and soybean oil prices are cointegrated even though separately, each time series is non-stationary. This suggests there exists a long run time series is non-stationary. This suggests there exists a long run equilibrium relationship between the two variables. Bidirectional causality is established at the 5 per cent level of significance for the causality is established at the 5 per cent level of significance for the F-test, however, at the 1 per cent level of significance, a unidirectional causality from soybean oil price to palm oil price is establishe

Aggregate import demand and expenditure components in five ASEAN countries: an empirical study

This paper examines the long run relationship between aggregate imports and expenditure components of five ASEAN countries using Johansen multivariate cointegration analysis. The ASEAN-5 countries considered are Malaysia, Indonesia, the Philippines, Singapore and Thailand. Annual data for the period 1968-1998 are used with the exception of Singapore, with a shorter sample period, 1974-1998. The final demand expenditure variable is disaggregated into public and private consumption expenditure, investment expenditure and exports. The use of a disaggregated demand variable, as opposed to the use of a single demand variable, is justified by the possibility that each final demand component may have different import contents. The approach employed in this study avoids the problem of aggregation bias. The results of Johansen’s multivariate test reveal that import demand is cointegrated with its determinants for all ASEAN-5 countries. Short-run variations in import demand found to be influenced by variations in relative prices and macro components of final demand. Import demand is also found to be elastic with respect to relative prices for all ASEAN-5 countries except the Philippines. The findings provide a relevant for policy implications