Muhammad Najit Sukemi · Madeline Berma · Shamsul Amri Baharuddin · Faridah Shahdan ·Jurnal Ekonomi Malaysia ·2018
Affirmative action is a mechanism of conflict resolution in situation of ethnic tensions and socio-economic imbalances. In Malaysia, affirmative action was implemented through a New Economic Policy (NEP) from 1970 to address economic imbalances and wealth inequality among ethnics through the distribution of the equity with the goal of 30% Bumiputerasowned and 40% non-bumiputera owned. After 40 years of implementation, the goal of equity distribution still yet to be achieved. However, does the implementation of affirmative action affects the distribution of wealth for each ethnic groups? Thus, this study aims to evaluate the influence of affirmative policies to the distribution of wealth between ethnic groups in Malaysia. This study will use equity data for ethnicity holdings for a period from 1969 to 2012 and will be tested using the Autoregressive distributed lag (ARDL) approach. The findings show the implementation of affirmative action has significant influence in affecting the distribution of wealth between ethnic groups in the short term and the long term. The study also proves the wealth distribution between ethnic groups was distributed through growing economy rather than through the acquisition of the other ethnic ownership, especially Chinese ethnic was later and transferred to the Bumiputeras.