The impact of economic factors on financial performance in Malaysia

This research determines the impact of microeconomic, industry-specific, and macroeconomic variables on the financial performance of the economic sector in Malaysia, namely construction, consumer products and services, energy, health care, industrial products and services, plantation, property, technology, telecommunications and media, transportation and logistics, and utilities. The research used panel data analysis for all 11 economic sectors in Bursa Malaysia and covered the period from 2010 to 2019. It is identified that the lagged effect of financial performance has significant impact on financial performance for the overall and 3 specific economic sectors such as consumer products and services, industrial products and services, and property. Microeconomic and macroeconomic variables meanwhile lead to different impacts on economic sectors. The findings benefit various parties such as investors and policymakers. Apart from that, information obtained from the analysis can also be used for future research

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

Demystifying the Issue of House Affordability in Malaysia: The Bi-Directional Relationship Between House Prices, Economic Growth, and Income Inequality

To understand the issue of house affordability in Malaysia, this study investigated the relationship between house prices and economic growth based on the data from the year 2000 to 2020. By utilizing the Toda-Yamamoto Granger causality test, it is identified that the relationship between the variables is bidirectional where house price movement is explained by economic growth. It implies that economic development drives house prices upward in the country. Conversely, the level of economic growth is also determined by house prices, and this clarifies the significant role of the housing market in stimulating the economy. The analysis also indicates that there is a mutual interaction between house prices and income inequality. Although the increase in house prices leads to higher economic growth, the rise in aggregate income that comes with it is enjoyed mainly by the top income earners of society. These findings are important for policymakers in addressing the issue of house affordability since it suggests that the issue of house affordability is partly contributed by income disparity. Since house price moves together with economic development, houses in Malaysia should remain affordable as long as income disparity is lessened if not diminished by ensuring that the economic prosperity is equally distributed among the society

The impact of macroeconomic variables on the economic performance of SMEs in Malaysia: An analysis of SMEs in five major sectors

This study aims to examine the impact of macroeconomic variables on the economic performance of Malaysian SMEs from the year 2000 until 2018. The external issue reported that the continuous cost rising weighs down the performance and growth of SMEs expectedly. The internal deficiency and challenge used to determine the productivity and profitability of SMEs majorly, but limited studies to validate the performance of SMEs by using the macroeconomic variable. Thus, this study investigates the relationship between macroeconomic variables and SMEs performance. Macroeconomic data on the gross domestic product, inflation rate, interest rate, and government tax revenue were collected yearly from 2000 to 2018. The unemployment rate had taken into account as a control variable in this study. The analysis employed the Autoregressive Distributed Lag Model, Error Correction Model, Wald Test, and Keynesian Economic Theory. It is identified that in the long run, macroeconomic variables are collectively significant in influencing the performance of SMEs while the individual impact of macroeconomic variables is varied. The rise in the level of interest rate, inflation, and government tax revenue will result in a decline in the performance of agriculture, construction, mining and quarrying, and service sectors. It was found that all macroeconomic variables do not significantly influence manufacturing’s performance. Of all sectors of SMEs analyzed, the construction sector is affected by all macroeconomic variables. In the short run, the individual impact of macroeconomic factors is varied and it is also identified that the mining and quarrying sector and construction sector examine the faster speed of adjustment among other sectors within 1.3 years and 1.2 years separately. It is advised for policymakers to consider lowering the tax rate or offer a tax exemption program to encourage more business activities among SMEs. In future research, it is suggested to explore the granger effect among SMEs themselves, investigate the broader perspective of this phenomenon for SMEs by panel analysis, and employ a mixed-method approach to focus the managerial strategies undertake by SMEs during the unexpected economic situation

The Impact of Financial Technology on Commercial Banks: A Case Study of China

The aim of the research was to investigate the impact of financial technology on the financial performance of commercial banks. in China. Based on previous literature review and empirical evidence this study collects the annual financial data on local banks in China. A total of 23 commercial banks were used as sample of the study. The annual data ranges from 2011 to 2020. The data was analysed using GMM dynamic panel data model. Based on the analysis, the findings showed that financial technology has an overall positive impact on the return on asset of commercial banks

Human Development through the Lens of Digital Literacy

Digital inclusion has now become not only a matter of technological adoption, but the ability to use technologies where individuals are to possess necessary skills to make effective use of digital technologies. In this regard, digital literacy is seen as a crucial enabler for individuals to take advantage of digital opportunities as well as to engage in digital activities. Building on the importance of digital literacy, this study therefore attempts to assess the role of Internet usage and digital literacy on human development, which is proxied by the Human Development Index (HDI). Using a panel dataset covering 38 countries over a 4-year time span from 2015 to 2018, results of regression analysis indicate that both Internet usage and digital literacy emerge with significant and positive relationships with HDI. This evidence suggests that the high number of Internet users and high level of digital literacy are important means for promoting human development. Additional moderation analysis between Internet usage and digital literacy also produces a positive and significant interaction effect, which subsequently implies that digital literacy is an essential skill in enhancing effective usage of the Internet towards achieving greater socioeconomic well-being

The Nexus between Information and Communication Technology (ICT), Electricity Access, Governance and Human Development: Evidence from Asia-Pacific Countries

The Asia-Pacific region has recorded the sharpest increase in human development progress globally and has seen shrinking gaps in basic standards and capabilities. However, inequalities around technology remain a cause for concern for the region, especially when countries with lower human development reportedly have limited access to technologies compared to countries with higher human development. Therefore, this study investigated the effects of information and communication technology (ICT), electricity access, and governance on human development in the Asia-Pacific region. A panel dataset of 46 countries from 2010 to 2019 was estimated using the Driscoll–Kraay standard error regression approach. Our findings revealed that ICT has a strong positive impact on human development for countries with high and medium human development. Internet usage is particularly significantly correlated with human development for both country groups, while mobile cellular subscriptions emerged as significant only for countries with high human development. The study also revealed significant positive effects of electricity access and governance on human development. The findings suggest that increased ICT adoption and electricity access, coupled with good governance, are crucial in improving people’s quality of life, thereby promoting greater human development. Limitations of the study include omission of the low human development group and a limited number of indicators used to measure ICT and governanc

Co-movement of covid-19, the S&P 500 and stock markets in ASEAN: A wavelet coherence analysis

This study examined the co-movement of ASEAN stock markets, COVID-19 cases/deaths, and the United States (US) stock market using wavelet coherence analysis. The findings revealed that the US stock market remained significantly dominant and was more influential to the ASEAN market. Nevertheless, coherence between the ASEAN stock markets and COVID-19 cases/deaths were also found but was limited during the crisis, and the impact of the number of deaths was lower than the number of cases. The results presented a significant disparity in the co-movements of each country. Such a phenomenon is expected as individual countries' economies tend to be more divergent during crises. Through wavelet analysis, the irregularity and uncertainty of co-movements can be detected more clearly and accurately with the interpretation of a heatmap

The relationship between government stability and foreign investment for selected ASEAN countries

The current paper investigates the relationship between government stability and foreign direct investment for nine selected ASEAN countries. Based on the panel data analysis, it is identified that political stability, government effectiveness, and control of corruption are significant in explaining foreign direct investment while regulatory quality and rule of law are not. With the exception to government effectiveness, the remaining government stability variables that are significant show positive relationship with the inflow of capital where an increase in political stability and control of corruption lead to a higher level of foreign investment. The economic growth which is represented by the Gross Domestic Product is also identified to be a vital determinant of foreign investment. From the results, it is clear that government stability is an important factor in attracting foreigners to invest in the domestic markets of ASEAN and should not be taken lightly by the policymakers. Any adverse movement in government stability may disrupt foreign investment and ultimately affecting the econom