Research

J. M. Shukri · Muzafar Shah Habibullah · Roseziahazni Abdul Ghani · M. A. M. Suhaily ·Jurnal Ekonomi Malaysia ·2021 ·JEL: E43, E52, F31, F32, F33, F41

The aim of this paper is to estimate the equilibrium of exchange rates and identify the roles of macroeconomics fundamentals affecting exchange rates using Malaysian data spanning 1970 to 2019. This study adopts the Autoregressive Distributed Lag model to examine the long-run relationships or cointegration among variables and the dynamic effect within variables in the short-run over the sample period. The results suggest that inflation rate and national income growth rate play important roles in influencing exchange rate movement. The results also reveal that the misalignment of exchange rates is quite small and stable during 1988 to 2019, except for 2015 which was attributed to the weaker growth in China. Consecutively, this study suggests that the parity condition is only important in the long-run in explaining exchange rates behaviour for the sample country.

Swee-Sim Foong · Jiunn-Shyan Khong · Boon-Leong Lim ·Malaysian Journal of Economic Studies ·2021 ·JEL: G32, G34

This paper examines the risk taking behaviour of Chinese CEO. Our analysis is based on a sample of 362 family firms in Malaysia over the 2009-2015 period using panel GMM methodology. Firstly, our results offer evidence that Chinese CEOs are risk taking. We then examine how CEO power, in the context of Finkelstein’s (1992) structural power, ownership power, expert power and prestige power, might drive risk taking of Chinese CEOs. The results are rather mixed where greater ownership power is likely to promote higher risk taking but greater expert power resulted in lower risk taking. We further show that corporate governance can mitigate risk taking of Chinese CEO in family firms. When the proportions of independent directors and foreign institutional shareholdings exceed the median thresholds of 40% and 5%, respectively, we find that CEO risk taking behaviour turns from positive to negative. Stronger evidence is found when we adjust the thresholds to the 75th percentile of 50% and 15%, respectively. The result is also robust with the use of leverage as a measure for CEO risk taking.

Ramasamy Thillainathan ·Malaysian Journal of Economic Studies ·2021 ·JEL: R42, O17

The focus of the paper is on toll road privatisation. An overview of the choice of privatisation and the form it took, in promoting the entry of Malays into business, is followed by a review of other studies on privatisation in Malaysia. Given the highly confidential nature of the privatised concessions, data on ownership and likely terms have been gleaned from rating of the bonds issued, as the bond market has been the key source of infrastructure financing. From such data, the dominance of the Malay managerial class over its business class is readily evident, especially after the Asian financial crisis (AFC). The likely impact of toll road privatisation on the stance of distribution is also examined. As concessions are still awarded on a negotiated basis, the issue of rent-seeking is also explored. Uncertainty and variability in the financial performance of the concessionaires can be seen from the spread and deterioration in credit of the issuers, attesting to the greenfield nature of the projects undertaken or due to differences in gearing or in the support and subsidy enjoyed from the government. The separation in ownership and control, either due to continued ownership by state-owned enterprises (SOEs) or widely held public listed companies (PLCs), has increased the risk of expropriation by those who exercise management control.

Siew Yee Lau · Ai Lian Tan · Chung Yee Liew ·Malaysian Journal of Economic Studies ·2019

This paper intends to examine the existence of asymmetric effect of public debt on private investment in Malaysia. As Malaysia's public debt has been rising in recent years the question has been raised on whether the persistently high debt level can negatively affect private investment or otherwise. This study, which uses non-linear autoregressive distributed lags (NARDL) estimation with data from 1980 to 2016, shows some evidence of asymmetrical effect in private investment-public debt nexus in both the long- and short-run. There are evidences of long-run asymmetry between private investment and total public debt, external debt, and federal government debt. In the short run, asymmetric relationship exists between private investment and domestic debt, external debt, and federal government debt. The findings also conclude that, in both long-run and short-run, higher public debt crowds out private investment, which is in line with the crowding-out effect hypothesis. Hence, policy-makers are advised to maintain public debt at a healthy level to ensure private investment is not being crowded-out.

Chee-Lip Tee · Azman Saini · Saifuzzaman Ibrahim ·Institutions and Economies ·2018 ·JEL: F14; F21; O31

This paper is an empirical assessment of the impacts of globalisation on innovative activity across developing countries. The focus is on the role of trade and capital account openness. Extreme-Bound-Analysis (EBA) approach is applied to analyse data from 58 countries over the 1996-2011 period. Though globalisation leads to greater interaction between countries through trade and Foreign Direct Investment(FDI), not all of these interactions affect domestic innovation activities. The result reveal only imports of machinery and equipment promote domestic innovation activity while there is insufficient empirical evidence to suggest that this relationship exists for imports of manufactured goods and FDI inflows. This finding is consistent with the view that import is a more important channel for technology transfer than FDI.

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.

Amir Lebdioui ·Review of International Political Economy ·2022 ·JEL: B5; L7; O11; O13; O14; O53; Q17

This article investigates the role of industrial policy in promoting upgrading in commodity sectors by examining the case of the petroleum, rubber, and palm oil industries in Malaysia. By doing so, it aims to contribute to an emerging scholarship that bridges the developmental state and the global value chains literature. Several findings emerge from this study. First, linkages do not unfold through market forces alone. Commodity value addition processes can be hindered by a range of barriers, including power dynamics alongside global commodity chains. The existence of high barriers for linkage development in developing nations justifies the need of state interventions. Second, successful government interventions for commodity value addition in Malaysia have gone far beyond fixing market failures and a ‘facilitative’ role of the state. Instead, the productive capabilities necessary for value addition were accumulated through coherent industrial policies and the strategic orientation of rents towards achieving productivity gains and learning. Third, political considerations, such the base of the ruling coalition, the regime type (marked by both executive dominance and political competition), and the influence of the regional intellectual climate, are essential to understanding both the policy will and ability to pursue a developmental approach towards commodity value addition.

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.

Muralitharan Paramasua · Evelyn S. Devadason · Pardis Moslemzadeh Tehrani ·Institutions and Economies ·2019 ·JEL: H70; P48; P45

Environmental regulation is a key driver for the growth of environmental goods and services (EGS), while trade facilitates the diffusion of these goods and services. There has been no shortage of initiatives to develop the EGS sector in Malaysia.However, some policy (non-market) failures are already observed in the governance of this sector. This paper identifies the inadequacies in the regulatory framework (environmental institutions and laws) for creating an enabling environment for the EGS sector. The paper also reviews the trade direction for EGS and delineates concerns related to the sectoral approach of policy making for the sector. The findings from the documentary analyses suggest that the laws and policies related to the EGS are fragmented as they come under the purview of different agencies. As a result of this regulatory incoherence, the coordination and enforcement are weak leading to low uptake of EGS. The absence of a national policy for EGS also obscures the trade direction for this sector. The policy priority and generous support accorded to the renewable energy segment, more specifically, are also a concern given the limited and uncertain role that this segment is expected to play in global energy use.

Izaan Jamil · Mori Kogid · Thien Sang Lim · Jaratin Lily ·Economies ·2022

This paper investigates the impact of soybean and crude oil futures on palm oil indexes by utilising monthly data from three palm oil indexes listed in Bursa Malaysia, i.e., the Asian palm index, Malaysian palm index, and Plantation index, spanning from January 2010 to June 2020. The impacts were analysed using the Autoregressive Distributed Lag (ARDL) bounds test approach and causality test. The statistical findings revealed that the Asian palm index has a long-run relationship with crude oil futures and crude palm oil, and a short-run relationship with soybean futures, crude oil futures, and crude palm oil. On the other hand, the Malaysian palm index has a short-run relationship with soybean futures and crude palm oil, whereas the Plantation index has a short-run relationship with crude oil futures, crude palm oil, and exchange rate. For the long-run strategy, this study recommends close monitoring of crude oil futures. Meanwhile, the short-run strategy requires close monitoring of the crude oil and soybean futures. Eventually, the empirical findings proposed that interested parties such as fund managers, investors, and traders should pay attention to crude oil and soybean futures to mitigate risk and diversify their portfolios with greater emphasis on crude oil futures.

Farah Ajlaa Julaihi · Asmah Alia Mohamad Bohari · Mohd Azrai Azman · Kuryati Kipli · Sharifah Rahama Amirul ·Pertanika Journal of Social Science and Humanities ·2022

Many countries are witnessing a rise in the ageing population, which has become a global phenomenon that all nations must address. As the population of greying people is expected to increase in Malaysia, the demand for senior citizen accommodation is predicted to have experienced a major rise by 2030. However, although studies related to retirement villages (RV) are highly important to understand how to provide a better ambience for the elderly, research on the development of retirement villages in Malaysia is yet to gather pace fully. Thus, this paper aims to explore the potential of the retirement village in Malaysia by focusing on the push factors for the elderly to move to retirement villages in the local Malaysian context. The outcome of this paper presents the initial findings derived from a literature review and pilot survey. Eight potential push factors were identified after questions were posed to potential respondents through a pilot survey questionnaire. The research revealed that the main potential reason why the elderly relocate to retirement villages was related to social factors, with the elderly preferring better access to healthcare and support due to their unique requirements. The findings of this study are relevant to Chapter 11, as underlined in the Sustainable Development Goals (SDGs), which call on all governments to offer access to a secure, green environment for everyone, especially the elderly. Theoretically, this research provides the first findings on the elements that encourage the elderly to relocate to an RV when they retire in Malaysia.

Sui Hai Juan · Irene Wei Kiong Ting · Qian Long Kweh · Liu Yao ·Institutions and Economies ·2018 ·JEL: M12; M5

Employee engagement has emerged as a hot topic among academics and scholars over the last decade since organisations worldwide have adopted that lingo. However, little is known about how knowledge sharing,one of the main resources for organisations to maintain their competitive advantages, would affect employee engagement. Therefore, the objective of this study is to assess the impact of knowledge sharing on employee engagement based on the social capital theory. Data was obtained via questionnaires distributed to 180 randomly selected academics of public and private universities in Malaysia. This study applies multiple regression models to examine how three dimensions of knowledge sharing, namely structural, relational and cognitive, affect employee engagement. The results show all three aspects of knowledge sharing significantly and positively affect employee engagement. Specifically, work environment, leadership, organisational policies, communication, training andcareer development, compensationandteam andco-workers in the knowledge sharing context improve employee engagement. This study is among the first to examine howorganisations can better utilise knowledge sharing to engage their employees at work, which in turn help the organisation attain and sustain competitive advantages. Therefore, the addresses of knowledge sharing and employee engagement in this study are important and deserve further enrichments by including other knowledge management practices in the models.

Woei Chyuan Wong · Abd Halim Ahmad · Shamsul Bahrain Mohamed-Arshad · Sabariah Nordin · Azira Abdul Adzis ·Malaysian Journal of Economic Studies ·2022 ·JEL: G32

This paper examines the determinants of Malaysian listed firms’ environmental, social and governance (ESG) performance during the period 2005–2018. We focus on individual firms’ continuous efforts to improve their ESG scores once they are ESG rated. Panel fixed effect results reveal that the number of years since a firm was first included in Bloomberg’s ESG score is positive and significantly related to its ESG performance. We interpret this as evidence of firms’ deliberate efforts to improve their ESG scores once they fall under the radar of a third-party ESG rating agency. This finding underscores the importance of third-party rating agency in fostering greater corporate sustainability. We contribute to the literature that posits that ESG third-party rating agency can lead to higher level of ESG practices of the rated firms.

Nurazilah Zaina · Fakarudin Kamarudin · Law Siong Hook · Mohammed Hariri Bakri · Fadzlan Sufian · Annuar Md Nassir ·Malaysian Journal of Economic Studies ·2020 ·JEL: G01, G21, G28

This study delivers new empirical evidence on the impact of banking regulations on the levels of social and financial efficiency of microfinance institutions (MFIs) between the years 2012 to 2018. The sample consisted of data from 172 MFIs from ASEAN-5 countries. As the first stage of the analysis, data envelopment analysis (DEA) was employed to determine a score of the level of social and financial efficiency for the sampled MFIs. Meanwhile, panel regression analysis and the Generalized Method of Moments (GMM) estimator were used to examine the impact of banking regulations on the level of social and financial efficiency of the sampled MFIs. The findings showed that the sampled MFIs achieved a lower level of social efficiency while attaining a higher level of financial efficiency. The lower level of social efficiency indicated that the sampled MFIs had lost their focus on poverty reduction, while at the same time, switching their focus toward financial sustainability. The empirical findings also showed a significant impact of bank regulation and bank supervision on the levels of social and financial efficiency. Overall, bank regulation negatively influenced the level of social efficiency and bank supervision impacted the level of financial efficiency of the sampled MFIs positively. The findings from this study provide new insights for bank regulators and policymakers to construct regulatory frameworks that are relevant to the operation of MFIs.

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.