Relationship between financing facilities and small and medium industries: empirical evidence from ARDL bound testing approach

A major challenge to the competitiveness of sustainable economic development is a country's global economic position. Small and medium industries, supposed to be drivers of economic development of a country, receive much of negative impact following the global economic uncertainty environment. This includes facing increasingly critical financial facilities. This study seeks to analyze the empirical relationship between small and medium industries and the financing facilities in the short-run and long-run in the state of Sabah, Malaysia. The ARDL bound testing approach was applied, using annual time series data for the years between 1976 through 2005. The successes of small and medium industries have been related to availability of financing facilities. Results show that the relationships between small and medium industries and financing facilities seem to exist in the long-run. In addition, there is a causal relation between small and medium industries and financial loan. The conclusion is that financing facilities may not be the most important factor in the development of small and medium scale industries, but small and medium industries on the other hand functions as the paramount important factor in the development of financing facilities.SMI, Financing facilities, ARDL, Sabah

Multi-Factor Crime in Malaysia, 1980 – 2013: Bounds Testing of Level Relationships and Granger Non-Causality Analysis

This study examines the relationship between criminal activities and the multi-macroeconomic factors of economic growth, unemployment, poverty, population and inflation in Malaysia from 1980 to 2013. The ARDL bounds testing of the level relationship was used to establish the long-run relation, and the Toda-Yamamoto Augmented VAR approach was used to test the short-run impact based on partial Granger non-causality analysis. Empirical results suggest that economic growth, inflation, poverty and population are significant factors affecting criminal activities in Malaysia with economic growth and poverty recording positive effects, whereas negative effects were recorded for inflation and population in the long-term. Further investigation using Granger non-causality analysis revealed that only population does Granger caused the criminal activities in the short-run. The findings provide useful information for policymakers to strengthen the existing crime-related policies in order to improve safety and security while maintaining economic sustainability in Malaysia

Macroeconomic Determinants of House Prices in Malaysia

House prices in Malaysia are considered to be seriously unaffordable as the median all-house price is relatively higher than the annual median income. Although the issue of house prices is prevalent in the country, few studies have been done to determine factors that influence its movement. The current paper, therefore, attempts to investigate the causal relationship between macroeconomic variables and house prices in Malaysia by accounting for the existence of a structural break for the variables. It is identified that in the long run, macroeconomic variables are collectively significant in influencing house price movement while the individual impact of macroeconomic variables is varied. The rise in the level of interest rates, housing supply, and inflation will result in the decline in house prices while gross domestic product and local currency appreciation cause the price to increase. It was found that stock prices do not significantly influence house prices. Of all the macroeconomic factors analyzed, exchange rate fluctuations appear to be most significant in explaining the movement of house prices. In the short-run, all macroeconomic factors are individually significant in influencing house prices and it is also identified that house prices tend to move back into their long-run state after temporary macroeconomic shocks with the speed of adjustment around 5.2 percent quarterly. It is advised for the policymakers to constantly monitor the movement of macroeconomic factors and take necessary actions to cushion the adverse impact of the movement of house prices in the country

¿Es suficiente el crecimiento económico para paliar la pobreza?: Experiencia en Malasia

Malaysia’s success story has been highlighted by the remarkable social transformation and poverty reduction accompanying rapid economic growth. Some three decades ago, more than half of the population was poor, the number of illiterates was high, and the average person could only hope to live until the age of 48. The proportion of poor people is currently down to 5.6 percent, 90 percent of adults are literate, and life expectancy is up to 68 years. Although Malaysia’s population has increased from approximately 10 million in the 1960s to about 28 million in 2010, the number of poor people has dropped significantly during this period. This paper attempts to determine the empirical relationship and importance of growth for poverty reduction in Malaysia. The results show that growth explains much, but not all, about the evolution of poverty. Economic growth is necessary but not sufficient for poverty reduction, especially if the objective is rapid and sustained poverty reduction. This study proposes that if a policy’s objective is focused on poverty alleviation, poverty reduction as well as economic growth should be simultaneously taken into account as the final targetLa historia del éxito de Malasia se ha visto evidenciada por la sorprendente transformación social y la disminución de la pobreza que han acompañado al rápido crecimiento económico. Hace unos treinta años, más de la mitad de la población era pobre, las tasas de analfabetismo elevadas y el ciudadano medio sólo podía esperar llegar a los 48 años. La proporción de población pobre actualmente se ha reducido al 5,6 por ciento, el 90 por ciento de los adultos cuenta con una educación y la esperanza de vida alcanza los 68 años. Aunque la población de Malasia se ha visto aumentada de los aproximadamente 10 millones en los años 60 a los 28 millones registrados en 2010, el número de ciudadanos pobres ha decaído de forma significativa durante este periodo. Este artículo pretende determinar la relación empírica y la importancia del crecimiento en la mitigación de la pobreza en Malasia. Los resultados demuestran que el crecimiento tiene mucho que decir, aunque no todo, en la evolución de la pobreza. El crecimiento económico resulta necesario, aunque no suficiente, para paliar la pobreza, sobre todo si el objetivo es una reducción rápida y sostenida. Este estudio propone que, si el objetivo de una política se centra en paliar la pobreza, tanto la reducción de la misma como el crecimiento económico acabarán siendo parte simultáneamente del objetivo fina

Asymmetric effect of real exchange rate risk on foreign direct investment: Empirical evidence in ASEAN-4

This study investigates the asymmetric effect of exchange rate risk (volatility) on the real foreign direct investment (FDI) inflows in Malaysia, the Philippines, Singapore, and Thailand (ASEAN-4) using the Nonlinear Autoregressive Distributed Lag (NARDL) model. The results revealed the occurrence of a long-run asymmetric cointegration between real FDI inflows and real exchange rate risk in the Philippines, Singapore, and Thailand, but not in Malaysia. For the Philippines and Singapore, there is evidence of long-run asymmetry whereas short-run asymmetry exists for the case of Thailand. These findings imply that the asymmetric effects prove to be useful in providing essential information to the related parties on how FDI inflows react to exchange rate risks differently. Therefore, policymakers in ASEAN countries should be concerned about the asymmetric effect of the exchange rate volatility to mitigate the stylized effects of exchange rate movements on FDI inflows

Multi-Factor Crime in Malaysia, 1980 – 2013: Bounds Testing of Level Relationships and Granger Non-Causality Analysis

This study examines the relationship between criminal activities and the multi-macroeconomic factors of economic growth, unemployment, poverty, population and inflation in Malaysia from 1980 to 2013. The ARDL bounds testing of the level relationship was used to establish the long-run relation, and the Toda-Yamamoto Augmented VAR approach was used to test the short-run impact based on partial Granger non-causality analysis. Empirical results suggest that economic growth, inflation, poverty and population are significant factors affecting criminal activities in Malaysia with economic growth and poverty recording positive effects, whereas negative effects were recorded for inflation and population in the long-term. Further investigation using Granger non-causality analysis revealed that only population does Granger caused the criminal activities in the short-run. The findings provide useful information for policymakers to strengthen the existing crime-related policies in order to improve safety and security while maintaining economic sustainability in Malaysia

Multi-Factor Crime in Malaysia, 1980 – 2013: Bounds Testing of Level Relationships and Granger Non-Causality Analysis / Dullah Mulok, Mori Kogid, Rozilee Asid, Jaratin Lily

This study examines the relationship between criminal activities and the multi-macroeconomic factors of economic growth, unemployment, poverty, population and inflation in Malaysia from 1980 to 2013. The ARDL bounds testing of the level relationship was used to establish the long-run relation, and the Toda-Yamamoto Augmented VAR approach was used to test the short-run impact based on partial Granger non-causality analysis. Empirical results suggest that economic growth, inflation, poverty and population are significant factors affecting criminal activities in Malaysia with economic growth and poverty recording positive effects, whereas negative effects were recorded for inflation and population in the long-term. Further investigation using Granger non-causality analysis revealed that only population does Granger caused the criminal activities in the short-run. The findings provide useful information for policymakers to strengthen the existing crime-related policies in order to improve safety and security while maintaining economic sustainability in Malaysia

Asymmetric effect of real exchange rate risk on foreign direct investment: Empirical evidence in ASEAN-4

This study investigates the asymmetric effect of exchange rate risk (volatility) on the real foreign direct investment (FDI) inflows in Malaysia, the Philippines, Singapore, and Thailand (ASEAN-4) using the Nonlinear Autoregressive Distributed Lag (NARDL) model. The results revealed the occurrence of a long-run asymmetric cointegration between real FDI inflows and real exchange rate risk in the Philippines, Singapore, and Thailand, but not in Malaysia. For the Philippines and Singapore, there is evidence of long-run asymmetry whereas short-run asymmetry exists for the case of Thailand. These findings imply that the asymmetric effects prove to be useful in providing essential information to the related parties on how FDI inflows react to exchange rate risks differently. Therefore, policymakers in ASEAN countries should be concerned about the asymmetric effect of the exchange rate volatility to mitigate the stylized effects of exchange rate movements on FDI inflows

Stock Market Development and Economic Growth in Malaysia: A Revisit from 1982 to 2014

The study examines the relationship between the development of the stock market and economic growth in Malaysia using annual data from 1982 to 2014. The development of the stock market represented three indicators, namely the turnover ratio, the shares value traded ratio and the market capitalization ratio. Augmented Dickey-Fuller stationarity test was carried out prior to the use of a bound test approach for co-integration and causality testing. The findings of the co-integration analysis showed that there is evidence of a long-run relationship between economic growth and the development of the stock market. Further examination of the causal relationship showed proof of the shortrun interaction between economic growth and the development of the stock market. These findings may be of importance to policymakers in formulating growth policy and financial decision-making by investors

Long-run shifts of the Beveridge curve in Peninsular Malaysia, Sabah, and Sarawak

Unemployment is one of macroeconomic issue faces by many countries that showing the inefficient use of the capital resources in the market This paper evaluated the Beveridge curve for Peninsular Malaysia, Sabah, and Sarawak. The objectives were to find out the relationship between the unemployment rate and job vacancy rate. A series of job vacancies and unemployment was constructed from year 1982 until 2017. Secondary data (N=35) was analysed using the Simple Linear Regression to find out the causality and correlations between variables. The results shows that both Peninsular and Sarawak has a negative significant relationship between the variables which implies that the shifting of unemployment rate over the year was affected by the job creation. The Beveridge curve was constructed to shows graphical relationship between the job vacancies rate and unemployment rate. This study suggests that economic growth playing an important role through the job creation in way to eradicate the problem of unemployment. In addition, aside from the quantity of job creation, the quality and the location of the job vacancy also took an important role in affecting the number of jobless persons in the labour market