Research

Saizal Pinjaman · Mori Kogid ·Jurnal Ekonomi Malaysia ·2020

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.

Beng Ann Tee · Siew Yean Tham · Andrew Jia Yi Kam ·Malaysian Journal of Economic Studies ·2020 ·JEL: F1, F14, L8

ICT intensive services were found to contribute to the service export growth in developed countries. However, empirical work on the role of ICT in ASEAN’s services export is sparse due mainly to the scarcity of bilateral services trade data. This study uses mirror data from the ASEAN-5’s trading partners from 2000 to 2012 for examining the impact of ICT on the ASEAN-5’s services export. A set of constructed ICT indicators are found to have significant positive network effect on the ASEAN-5’s services export. Thus, the higher the ICT development level in both trading partner countries, the higher their bilateral services exports with each other. But, the positive impact of ICT on the ASEAN-5’s trade in services can be offset by the presence of trade costs. Therefore, policies enhancing trade facilitation should be used in tandem with the development of ICT in order to promote the ASEAN-5’s services export.

Chakrin Utit · Mohd Alzaiery Abdul · M. Yusof Saari ·International Journal of Economics and Management ·2022 ·JEL: C67, D57, L11

Small and medium enterprises (SMEs) are undeniably the backbone of many developing economies, considering their sizeable share of business establishments and contribution to employment creation. Nevertheless, they have fallen short of policymakers' expectations because of the weak interlinkage issue that limits their ability to create wealth. The issue stems from SMEs' excessive reliance on non-SMEs as their primary input sources, while non-SMEs are more dependent on their cluster and imports. This paper seeks to assess the magnitude of the issue in Malaysia and Thailand by comparing the productive structures of SMEs in both economies using the cascaded input-output modelling technique. The findings validated the weak interlinkage issue in Malaysia and Thailand, with the latter suffering from it to a greater extent. Overall, SMEs remain integral to the growth drivers of developing economies. Therefore, development policies should continue to support them by considering their value-added multiplier impacts. Considering all facts and figures, strengthening existing linkage programmes and establishing an SME content requirement policy are this study's two recommendations for improving the interlinkage situation

Soliha Sanusi · Nik Herda Nik Abdullah · Lim Tan Chin · Fauziah Rastam · Nabilah Rozzani ·International Journal of Economics and Management ·2021 ·JEL: M41

This study investigates the higher learning institution students' tax knowledge, tax attitude, tax morale, and the role of tax authorities with the moderation of the education area that influences tax awareness in Malaysia. Data from 224 respondents were collected physically and via online across Malaysia. The Structural Equation Model by using Smart PLS 3.2.4 was used to analyse the data, whereby five hypotheses were tested in the current study. The results showed that tax knowledge, tax attitude, and tax morale significantly influenced tax awareness. The result also indicated that the education area was able to moderate the relationship between the role of tax authorities and tax awareness. The findings of this study contributed to the research on tax area as only a few researches had been conducted on tax awareness, especially in Malaysia. It was suggested to compare the tax awareness amongst different countries as a comparative study to understand what tax authorities of other countries have contributed to their students in the higher learning institutions.

SOH WEI NI · ANNUAR MD NASSIR · CHENG FAN FAH ·International Journal of Economics and Management ·2018 ·JEL: M42; M41

A corporate cash holding is significant element in the cash and liquidity management. Corporations with higher excessive cash reserves will benefit when high liquidity makes it easier for managers to transfer funds among several of the corporations’ expenses and debts, and allows for more flexibility in managing daily operational activities. However, it raise some issue as firm with higher cash holdings tend to explore to higher agency cost due to the conflict of interest between ownership and management. This study employs data envelopment analysis (DEA) estimation and two-stage regressions model. The findings conclude that the firm size, firm growth, and gross domestic product (GDP) are statistically significant for firm efficiency in both markets. The cash holdings help improve firm efficiency as the adjusted R-square is significantly increased for all models. However, the cash holdings are not related to the efficiency of high-cash holding firms for these two stock exchanges. The contribution of cash holdings to firm efficiency is higher, and even double for a developed market compared with a developing market (Bursa Malaysia), which shows that the development stage of a country impacts on cash holdings’ contribution to firm efficiency.

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.

Ummu Kolsome Farouk · Mok Siew Wing ·Malaysian Journal of Consumer and Family Economics ·2019

The purpose of this research is to understand why a co-founder chose to establish a non-governmental organization (NGO) type social enterprise, the challenges he faced in managing its social and financial sustainability, and the initiatives he took to negotiate those challenges. A narrative approach was used in this qualitative single case study to analyse the self-accounts of the co-founder, and the various internal and external information. The primary drivers of the co-founder's establishment of an NGO type social enterprise were his recognition of an opportunity to redress the prevalence of social ills adversely affecting children, his extensive experience on social issues impacting children, and the successful establishment of his first NGO. Primary challenges faced by the co-founder were notably in terms of maintaining the social relevance of his NGO and securing both its financial sustainability and future scalability. The research is limited by the fact that it is a narrative study, based upon the lived experience, of the co-founder of an NGO type social enterprise. Hence, although the generalizability of the findings is compromised, it can still be placed in the context of past research, in the area of social entrepreneurship in general, underpinned by Malaysia’s social entrepreneurship landscape. This paper provides evidence on how the co-founder of an NGO type social enterprise assessed its developmental stage, measured its success, and paved its path toward becoming a centre of excellence.

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.

Muzafar Shah Habibullah · Mohd Yusof Saari · Badariah Haji Din · Sugiharso Safuan · Chakrin Utit ·Jurnal Ekonomi Malaysia ·2021 ·JEL: H30, I18, J64

In this empirical note, we examine the relationship between the loss of employment and lockdown measures undertaken by the Malaysian government during the Covid-19 pandemic outbreak over the period from 25 January 2020 to 10 September 2020. By using cointegration analysis, our results suggest that there are both long-run and short-run relationships between loss of employment and lockdown measures in Malaysia. Lockdown measures show positive impact on the number of workers who lost their jobs during the pandemic. The loss of employment increases by 0.35% to 1.1% for every 1% increase in the lockdown measures.

Fairus Halizam A Hamzah · Nadiah Abd Hamid · Siti Noor Hayati Mohamed Zawawi · Rohayu Yusup · Norazah Md Azali ·Malaysian Journal of Economic Studies ·2020 ·JEL: G3, M42, E62, H32, E62

The Inland Revenue Board of Malaysia (IRBM) provides a monitoring mechanism of corporate governance through tax audits. However, indicators associated with the tax authority monitoring system remain underexplored due to data confidentiality. This study aims to examine the indicators used by the tax authority in performing tax monitoring where the tax return data of firms that claim reinvestment allowance (RA) were employed alongside the historical audit data of corporate taxpayers of both a tax-monitored firm and an unmonitored tax firm. The results of the analysis reported that the tax authority monitoring system is closely associated with fundamental details disclosed in the tax return namely, assessment year, profitability, scale of operation, firm directorship, tax consultancy and industry type. In contrast, the incidents of tax avoidance and incentive utilisation indicators were not prominent in tax authority monitoring. The investigation of firms that experienced tax monitoring provides insight into indicators which interest tax authorities when it comes to a firm’s tax audit. This research revealed new evidence on IBRM preferred indicators in conducting tax monitoring.

Rokshana Shirin Asa · Ida Madieha Abdul Ghani Azmi ·Malaysian Journal of Consumer and Family Economics ·2018

The process of halal certification is dependent on the construction of what is deemed to be falling within halal parameters set by the Quran and Sunnah, being the two primary sources of Shari'ah, and supplemented with juristic opinion and issuance of fatwa by national religious authorities. In Malaysia, the authority responsible for halal certification is JAKIM while the authority responsible to provide rulings on halalness is the National Fatwa Committee. This article examines the guiding principles for the concept of halal in the Quran and Sunnah and the collection of fatwa on food products by the National Fatwa Committee. Together, the three sources constitute the yardstick to the implementation of halal in Malaysia. Using content analysis, the article analyses the meaning and construct of the three primary sources and examine the issues and concerns arising from the implementation of halal certification process in Malaysia. The article also highlights the views of Yusuf al Qaradhawi, being the most prominent scholar on the underlying principles of what constitute of halal and haram. The article concludes that whilst the Quran has outlined the general principles for the determination of halalness, there is a considerable need for guidance from the religious bodies in the form of fatwa on any recurrent issues pertaining to food products and processes.

J.S. Keshminder · Gurmit Kaur Bariam Singh · Zainora AB. Wahid · Mohammad Syafiq Abdullah ·Malaysian Journal of Consumer and Family Economics ·2019

Green Sukuk serves as an alternative form of finance which is equipped with both climate mitigation and Shariah compliance features compared to conventional finance. Acknowledging the superiority of green Sukuk to raise funds to mitigate climate change, the World Bank took the lead to promote it globally by making Malaysia the premier green Sukuk hub. This study seeks to assess the development of green Sukuk from the aspect of issuance and Shariah principle used in Malaysia since its inception in 2014. The study reveals that the development in the green Sukuk market is slow but is robust in moving from the energy industry to the building industry, while Shariah contracts used are based on the issuers' underlying assets. The study concludes that the green Sukuk market is still small and liquidity constraint makes it difficult for investors to gain access. For the government to increase green Sukuk issuance, information about the performance, challenges, risks, and opportunities in the realm of green Sukuk must be made available to both issuers and investors.

Norimah Rambeli · Dayang Affizzah Awang Marikan · Emilda Hashim · Siti Zubaidah Mohd. Ariffin · Asmawi Hashim · Jan M. Podivinsky ·Jurnal Ekonomi Malaysia ·2021 ·JEL: C32, O44, P48, Q56

The focal aim of this paper is to examine the relationship between total energy consumption, Gross Domestic Product, urbanization, trade openness and financial development on carbon dioxide (CO2) emissions. The study focuses on two selected ASEAN countries namely, Malaysia and Singapore, due to their major contribution in CO2 emissions among other ASEAN countries, after Brunei. This study adopts the quarterly time series data from Q1:2010 to Q1:2020. By utilizing the linear ARDL method, the presence of a positive and long-term relationship was confirmed between the variables for both countries. The findings also validate the Environment Kuznets hypothesis namely, that CO2 emissions will continue to rise until the national income reaches optimum point and beyond this environment quality will begin to improve. The results established that financial development helps to reduce CO2 emissions in both the short- and long-run. Further, trade openness tends to reduce CO2 in Malaysia. For Singapore however, it reduces CO2 in the short-run but not in the long-run. In general the study reveals that the relationship between emissions of CO2 and economic development is U-shaped, for both countries. For future sustainable environment the study implies that specific financial planning towards green technology is necessary to sustain a better environment. Economic growth of the country is therefore more meaningful if accompanied with a sustainable environment for future generations.

Chin-Hong Puah · Choi-Meng Leong · Abu Mansor Shazali · Evan Lau ·Jurnal Ekonomi Malaysia ·2018

BNM has discarded the use of monetary targeting due to the speeding up of financial reforms as the relationship between money and important macroeconomic indicators in Malaysia has weakened. However, the implementation of the interest rate targeting requires the authorities to alter the policy rate recurrently. Alternatively, the authorities may consider monetary targeting, which provides the ease of control of monetary aggregates, provided that a stable demand for money function can be derived. Nevertheless, financial liberalization has greatly affected the stability of money demand. Thus, this study estimated the demand for money function in Malaysia by considering the effect of the financial development in which a Divisia monetary aggregate has been constructed as an alternative measure of money and a monetization variable has been included in the function. The Johansen and Juselius cointegration test and error correction model are utilized to estimate the demand for money function. The empirical findings indicate that a plausible demand for money function is derived using Divisia M2. Furthermore, monetization appears as an important variable that contributes to a stable money demand. The presence of a stable Divisia M2 money demand has reassured the usefulness of monetary aggregate as the indicator for monetary policy purposes. Monetary targeting provides alternative policy target choice for the conduct of monetary policy. Divisia monetary aggregates can also serve as the alternative money measurement apart from the conventional money supply

M.S.M Khair-Afham · Anitha Rosland ·International Journal of Economics and Management ·2022 ·JEL: E44, E51

This study has examined the impacts of credit supply shocks and other common economic shocks (aggregate demand & supply and monetary shocks) on Malaysia's macroeconomic variables, using the Bayesian structural vector autoregressive (SVAR) model and employing sign restrictions. The results showed that an expansionary credit supply shock positively affected the Malaysian economy, consistent with the existing literature. Based on the variance decomposition finding, credit supply shocks explained a significant portion of the anticipated variation in the GDP growth, inflation, and, most importantly, credit growth in Malaysia. This study further decomposed total private non-financial corporate loans into two components: households and non-financial firms. Unlike other economies that have extensively researched this subject matter (US, UK, Euro Area), the growth rate of households and non-financial firms differed greatly in Malaysia. The empirical findings revealed considerable distinctions between these two components, indicating that different treatments or policy formulations are required rather than employing the same policy to boost or govern Malaysia's credit market