Microeconomics

Norlida Hanim Mohd Salleh · Suhaya Samad ·Jurnal Ekonomi Malaysia ·2018

The Federal Land Development Authority (FELDA) is fundamentally established for the purpose of addressing the poverty problem caused by the absence of agricultural land to generate income. Now, through the plan the main problem has been solved. In fact, in order to increase farmer income, various efforts have been made. Various forms of involvement are involved by settlers, including the involvement of the FELDA community in the homestay program. Participation in the homestay program not only addresses the problem of the lack of provision of accommodation services in remote tourism areas but can generate additional income to the community as well as bringing some additional impact. This study aims to analyze the impact of the community that is involved in the program. The impacts are in four (4) aspects, which are the economic, social, cultural and environmental aspects. This study is based on fieldwork with the aid of questionnaire as a study instrument. A total of 161 respondents were involved in this interview at several homestay locations throughout Peninsular Malaysia. Sample selection is randomly stratified. Mean analysis is used for the purpose of assessing the impact obtained besides assisted by one-way ANOVA test and Post Hoc Turkey HSD test. The findings show that the homestay program has a positive impact on the businessman in terms of economic, social, cultural and environmental impact. Compared to the economic impact, the higher the Semenchu Homestay, Mata Ayer and Sg. As compared to other homestays, while in terms of cultural impact, homestay Mata Ayer, Semenchu and Jengka homestay over other homestays. In terms of environmental impact, the benefits enjoyed by Homestay Sg. Klah is the highest. For social impact, this study found no significant difference between all homestay studies. Since the involvement in the homestay program can have significant impact on entrepreneurs, encouragement and assistance from the government and the FELDA are required. Homestay operators can also make high-impact homestays such as Homestay Semencu, Mata Ayer, Jengka and Sg. Klah as a model for developing their homestay.

Cai Yunchao · Selamah Abdullah Yusof · Ruzita Mohd Amin · Mohd Nahar Mohd Arshad ·Jurnal Ekonomi Malaysia ·2020

Using data collected from urban households in the Klang Valley, Malaysia, this study examined the impact of household debt on urban household consumption decisions. The findings revealed that household debt does not generally affect consumption decisions, except in the case of expenditure on vacation, which tends to be reduced for households facing high levels of debt. Furthermore, general financial wellness tends to be the main factor affecting consumption rather than debt. Households with poorer financial wellness make more frequent cuts to daily meals, fruit, utility, transportation, clothing, medical care, vacations, and leisure activities. Although the impact of debt on consumption is not extensive, it must be closely monitored to ensure that the risk is contained and that the wellbeing of households is not adversely affected.

Mohd Aqmin Abdul Wahab · Hazrul Izuan Shahiri · Mustazar Mansur · Mohd Azlan Shah Zaidi ·Jurnal Ekonomi Malaysia ·2018

This paper looks at the causes of increasing cost of living by studying two (2) main factors; frstly, the slow growth in income as compared to infation, and secondly the unproportional increase in standard of living as compared to income. For the frst factor, a time series regression model was constructred using the data from Household Income Survey report (various years) to compare the fuctutation in income against the infation rate year-on-year. For the second factor, we studied the expenditure elasticity of income for the household. A log-log linear regression model was developed taking into consideration the three (3) main groups of goods that household buys: Food, Transportation and Housing. We have studied the elasticities across income strata (B40, M40, T20) and location (Rural vs Urban) to observe the changes in elasticity with respect to those variables. The result of this study points that income growth has indeed surpasses infation rate from year to year, however the standard of living is increasing at a comparatively fast rate, as evidenced by high expenditure elasticities for several types of goods for B40s and M40s. This suggests that the standard of living, or living styles are the dominant factor that contributes to the problems of increasing cost of living.

Siong Hook Law · M.N.A. Naseem · Anitha Roslan · Nirvikar Singh ·Malaysian Journal of Economic Studies ·2021 ·JEL: G29, O11, O43

This study examines the effects of business (enterprise) credit and household credit on economic performance in Malaysia. The World Bank’s Doing Business report ranked Malaysia at number one among developing countries in terms of ease of getting credit in the six consecutive years since 2008. The analysis is based on quantile regression estimations, using quarterly time series datasets from 1999: Q4 to 2019: Q4. The empirical findings reveal that business credit is positively associated with economic performance whereas household credit is an insignificant determinant of economic performance. We also consider the interaction between credit and institutional quality, an emerging key fundamental variable that determines economic performance. The results demonstrate that only the interaction term between business credit and institutions is statistically significant. In short, business credit outperforms household credit in promoting economic performance in Malaysia. The empirical findings are robust to alternative control variables and quantile regression estimation techniques.

Gary John Rangel · Jason Wei Jian Ng · Thiyagarajan M Murugasu · Wai Ching Poon ·Malaysian Journal of Economic Studies ·2019

Housing affordability has been an important issue for both developed and developing countries. Prior literature has used the price-income ratio as the main standard to assess housing affordability with the median disposable household income of the sample population commonly used. As such, conclusions drawn from macro-level analyses lack practical policy considerations. This paper attempts to address the problem in greater detail by considering age cohorts, income percentiles and different house types. The results show that for those aged 20-24 and 60-64, housing is severely unaffordable across all house types, except for the 75th income percentile group. The most expensive - semi-detached and detached housing types - remain unaffordable to all income and age groups, except for the 75th income percentile group aged 30 and above. Terrace and high rise housing types are the most affordable across each income percentile. Based on the results, we extend the housing affordability literature through recommendation of several policy measures that may ameliorate the affordability conundrum.

Siew-Pong Cheah · Lin-Sea Lau · Chee-Keong Choong ·International Journal of Economics and Management ·2021 ·JEL: D3, D63, G51

Most past studies have assumed a symmetric relationship between income distribution and household indebtedness. Therefore, linear or symmetric modelling would miss possible asymmetric relationships between income distribution and household debt, resulting in misleading conclusions and policy suggestions. Thus, this study has explored the potential asymmetries between household debt and income inequality within long-run and short-run relationships. This study discovered that the association between income inequality and household debt was asymmetric in the long and short run using the nonlinear autoregressive distributed lag model. The results showed that only decreases in income inequality had a significant and positive effect on household debt, while increases in income inequality did not have a significant effect. The findings emphasised the need for policies to reduce income inequality to lessen debt among Malaysian households.

Angayar Kanni Ramaiah ·Malaysian Journal of Consumer and Family Economics ·2019

The digital economy relies on digital computing technologies and online platforms and its consumer market is based on the internet and the World Wide Web. Its rapid technological progress is very innovative and disruptive. Digital market revolutionized and affected the functioning of the established, often regulated business pattern which includes the market competition and consumer welfare both positively and negatively. Digitalization has transformed the manners consumers purchase the goods or services (i.e. the purchasing pattern) and impacted the choice, safety standard, and price determination methods. The platform-based business model involves multisided markets, network effects, and economies of scale, and rather complex and different from the traditional brick and mortar pattern. It has granted beneficial scientific breakthrough for consumers but the way consumers make their choices (consumer market behaviour) on the online platform, related algorithmic pricing, collusion, data gathering manner, and the anti-competitive merger has caused various concerns among the competition regulators concerning the related harm on consumer welfare. Notably, the conventional consumer protection law is unable to address these issues because it is built upon different underlying theories of harm. The objective of the paper is to study the effect of the digital market on consumer welfare generally and specifically within the scope Competition Act 2010. The study examines based on some recent experience and case study involving digital firm, mainly Uber and Grab to discuss how certain characteristics of the digital economy impacts the competition and consequently the consumer welfare in Malaysia

Siti `Aisyah Baharudin · Hayyan Nassar Waked · Mohd Shah Paimen ·Jurnal Ekonomi Malaysia ·2021 ·JEL: A1, D1, E7

This research attempts to analyze households’ responses to Movement Control Orders (MCO) and assess the impact of MCO on consumer confidence based on the potential disproportionate impact on various income groups in Malaysia. Households’ responses and consumer confidence are measured through an online survey to collect the targeted groups’ financial situation and household information and expectations during MCO. A total of 660 respondents from all over Malaysia were involved in this study. Analysis of the MCO responses showed that households were able to comply with MCO rules with the highest positive response of 99.7%. In comparison, the households’ responses to the implementation of MCO showed the highest negative response of 18.4%, with the majority represented by the B40 income category (65.2%). The consumer confidence present index is operating at six times higher than the expectation index, which indicates that the implementation of MCO in the short-run has a moderate impact on households’ economic status than in the long-run involving the COVID-19 pandemic effect on the overall economy. According to the people’s confidence to the government in the long-run, current political developments are essential to influence the people’s confidence in the economy. The consumer confidence index gives an overview of two policies that need to be emphasized by the government. Based on the short-run status of food consumption, this study strongly recommends that the policymakers consider establishing a National Food Stockpile in light of the nation’s food security and moving on to food-based agriculture that considers the targeted groups in the long-run.

Rahmah Ismail · Syahida Zainal Abidin · Mohd Nasir Mohd Saukani ·Jurnal Ekonomi Malaysia ·2019

Worker’s quality is very crucial to enhance effciency level in an organisation. Workers of high quality are always associated with high effciency and productivity, which subsequently increase competitiveness of an organization. In the Malaysian context, technical effciency in the manufacturing sector is vital to be observed due to its signifcantly high contribution to Gross Domestic Product (GDP). In addition, this sector has rapidly created employment opportunities and listed under National Key Economic Area (NKEA). Worker’s quality can be measured using several methods, which are generally based on human capital achievement. The measurements that are frequently used in the literature are level of educational attainment and worker’s job category. However, these measurements ignore the role of wages, which refect workers productivity when examine its effect on technical effciency. This paper aims to analyse level of worker’s quality or referred as effective worker using composite measurement and examine its impact on technical effciency for the Malaysian manufacturing frms. Analysis is based on 1077 manufacturing frms in 2009 obtained from the Department of Statistics Malaysia, through the Survey of Manufacturing Industries 2010. The fndings show that level of effective workers and technical effciency for the manufacturing frms are still at the moderate level and even low for the micro-sized frms. The main determinants of technical ineffciency are effective workers, ICT expenditure, training expenditure and R&D expenditure. The results suggest that the manufacturing frms should enhance their human capital investment and increase their expenditure especially on training and R&D in order to increase its effciency.

Norhanishah Mohamad Yunus · Norehan Abdullah ·Malaysian Journal of Economic Studies ·2022 ·JEL: F20, F35, F61, J24, C21, L6

Using a set of absorptive capacity proxies, we present new empirical findings on the role of absorptive capacity in assimilating the technology effects from the presence of multinational corporations (MNCs) in the Malaysian manufacturing industry. We applied a quantile regression estimator to explicitly gauge the level of absorptive capacity among workers by their levels of education at different quantiles of the conditional FDI distribution during the period of 2000–2018. We conclude that the medium-high technology industries benefit more from FDI if the workers’ absorptive capacity level reaches at least the median quantile. Based on the findings of this study, we suggest that educational digitisation efforts in enhancing quality human capital should be intensified, by equipping them with the latest knowledge and skills, which in turn requires cooperation between universities, public technical and vocational education and training (TVET) institutions as well as MNCs.

Loo Sze Ying · Mukaramah Harun ·Jurnal Ekonomi Malaysia ·2019

This paper estimated the reactions of frms and households to the change of government expenditure from fuel subsidies to two alternative fscal regimes, including the expansion of government expenditure on agricultural investment and direct cash transfers. Outcomes brought by the government expenditure changes to outputs of production for frms, together with the household consumption expenditure, were taken into account. This study was carried out by using a Löfgren-based computable general equilibrium (CGE) model. The fndings showed that complete fuel withdrawal was found to have adverse impacts on frms and households. The withdrawal of subsidy brought a lackluster performance in domestic production. Firms that needed large amounts of fuel products to produce outputs were greatly affected. Besides, households of all segments faced large consumption loss. Nevertheless, the resulting adverse impacts on frms and households could be minimized with the implementation of mitigation measures along with the subsidy reform. The additional fund transfer to the agricultural sector had the merits of improving domestic production and minimizing the consumption loss of the population. In contrast, the direct cash transfer benefted the target population -- the mediumand low-income segments in the urban and rural areas.

Ee Shiang Lim · Jacqueline Liza Fernandez ·Malaysian Journal of Economic Studies ·2022 ·JEL: C13, D12

With the entrance of Uber into the land transportation industry, ride-hailing service has gained popularity and changed the way people travel in urban areas in Malaysia. Despite the growing popularity of this new mode of cab service, studies about factors influencing consumers’ choice to use ride-hailing service are limited in developing countries. This study used primary data collected via a survey in Penang, Malaysia. This study aims to examine the factors affecting consumers’ decision to utilise ride-hailing service. The novelty of this study is the adoption of a Heckman probit selection model to account for the possibility of sample selection bias and the introduction of an important explanatory variable - consumers’ comparative satisfaction with the attributes of ride-hailing and traditional taxi service that affect consumers’ choice of cab service. The results show age, gender, education, marital status, income, cost considerations and vehicle ownership significantly determine the probability of using cab service. Consumers’ choice between ride-hailing and traditional taxi service is affected by gender and their comparative rating of both services in terms of waiting time and the disposition of drivers. This suggests the necessity for cab service providers to improve their service in order to remain competitive in the industry.

Mohd Adib Ismail · Sharlily Shahira Mat Nasir ·Jurnal Ekonomi Malaysia ·2019

Financial resources are an important factor in investment decisions. Access to fnancial resources is a key determinant to increase productivity and consequently generate frm growth. This paper aims to investigate the impact of fnancial constraints, ownership types and structures on frm productivity. This study used annual data of frms listed on the main board of Bursa Malaysia from 2000 to 2015. This study employed system generalized method of moments (GMM) to analyze the impact of fnancial constraints, ownership and other control variables on productivity. The results show that fnancial constraints, and the ownership types and structures cause different impacts on frm productivity. Using the sub-sample analyses of government, private and foreign frms, the results indicates that foreign frms are most affected by fnancial constraints followed by government frms and private frms. In the negative liquidity situation, the fnancial constraints faced by government and private frms have increased. Meanwhile, exports have managed to reduce the impact of fnancial constraints on foreign frms. The analysis of ownership structure analysis fnds that it does not affect frm productivity. Hence, to boost domestic economic growth policy makers should formulate strategies that support frm fnancial aspect to ensure increased productivity and growth of local frms in Malaysia.

Nurul Nabila Yusof · Shahareh Shahidi Hamedani · Mazzlida Mat Deli · Mohd Helmi Ali · Mara Ridhuan Che Abd Rahman ·International Journal of Economics and Management ·2022 ·JEL: L66, P23

This study aims to empirically examine the migrant food handlers’ perceived knowledge, skills, and attitudes and their impact on food quality and safety in the context of Malaysia’s foodservice industry. Using the data gathered from 198 supervisors and managers from food premises in Malaysia and analysis using SPSS (version 20) and SmartPLS 3.0 software, this research found that migrant food handlers have moderate perceived knowledge, skills and attitudes in food handling practices impact the food quality and safety. Specifically, this study confirmed that knowledge and attitudes positively and significantly affect food quality and food safety. However, insignificant results were found between skills and food safety, even though it showed a substantial impact on food quality. The findings are original and unique. It is one of the first studies to investigate the knowledge, skills, and attitude of migrant food handlers their effect on food quality and food safety, especially in Malaysia. Besides, this study extends the established theories from the literature on knowledge, skills and attitudes analysing in the foodservice sector. Therefore, this research finding is valuable for food services practitioners to focus on enhancing food quality and safety through the migrant workforce.

Asma Rashidah Idris · Muzafar Shah Habibullah · Badariah Haji Din ·Jurnal Ekonomi Malaysia ·2018

The “old-age security” and “complete substitutability” hypotheses suggest that fnancial market can affect individuals’ decision to have less or more children. It has been recognised in the literature that at low level of fnancial development, children are considered an asset and a form of investment that could provide returns and security during old age. However, at higher level of fnancial development, individuals have more access to the fnancial market that can provide funds and fnancing during old age and as a result the demand for children is less. Furthermore, increase in female labour participation rate in the fnancial industry as well as in other economic sectors will also induce demand for fewer children. In Malaysia, the development of banks as well as the non-banking fnancial institutions has broadened credit accessibility to households and it could affects household’s decisions over the number of children they should have. Thus, the present paper empirically investigates the long-run relationship between fertility rate, fnancial development, income and household consumption in Malaysia for the period 1975 to 2013. In this study we employed the autoregressive distributed lag (ARDL) modelling approach for the testing of cointegration. Our results suggest that fnancial development and household consumption expenditure are negatively related to fertility rate, while fertility rate portrays a non-linear long-run relationship with income, thus exhibiting an inverted U-shaped curve with income in Malaysia.