Impacts of selected economics shocks on Malaysian external sector

• Main Author: Chai, Ai Hui
• Format: Final Year Project Report
• Language: English; English
• Published: Universiti Malaysia Sarawak, (UNIMAS) 2015
• Subjects: HC Economic History and Conditions
• Online Access: http://ir.unimas.my/id/eprint/12330/1/Impacts%20of%20selected%20economics%20shocks%20on%20Malaysian%20external%20sector%20%2824pgs%29.pdf; http://ir.unimas.my/id/eprint/12330/8/Impacts%20of%20selected%20economics%20shocks%20on%20Malaysian%20external%20sector%20%28fulltext%29.pdf; http://ir.unimas.my/id/eprint/12330/

The main research on this study is to estimate the variables of Malaysian economic growth (RGDP), real effective exchange rate (REER), world oil price (WOP), and industrial productivity index of United Stated (USIPI) which are used to explain the outcome of Malaysia’s net export (NEX) over period of 1980 to 2013 under time series econometric techniques such as ADF and PP tests, JJ cointegration test, VECM, granger causality test, Impulse-response functions (IRFs), and diagnostic checking. The results revealed that RGDP and REER are negative related with NEX, while WOP and USIPI are positive related with NEX during the period of 1980 to 2013. However, REER is not a major factor affect Malaysia’s net export as compared to other explanatory variables used in the model. WOP is the most significant impact on Malaysia’s net export in both short term and long term. Close linkage between U.S. and Malaysia is also important indicator to Malaysia’s net export. With the diagnostic checking, the model used in the study is valid and robust from 1980 to 2013. Limitations of the study are provided to improve the study in the future.