Market size and export-led growth hypotheses: New evidence from Malaysia
Exploring the causal relationship among exports, foreign direct investment (FDI) and economic growth is of enormous importance for the policy implications the causal process among the variables assume. The relevance of investigating the causal relationship between inward FDI and exports borders on...
| المؤلفون الرئيسيون: | , |
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| التنسيق: | مقال |
| اللغة: | English |
| منشور في: |
EconJournals
2016
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| الموضوعات: | |
| الوصول للمادة أونلاين: | https://repo.uum.edu.my/id/eprint/19650/1/IJEFI%206%203%20%202016%20971-977.pdf |
| _version_ | 1825804233858875392 |
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| author | Hassan, Sallahuddin Murtala, Musa |
| author_facet | Hassan, Sallahuddin Murtala, Musa |
| author_sort | Hassan, Sallahuddin |
| collection | UUM |
| description | Exploring the causal relationship among exports, foreign direct investment (FDI) and economic growth is of enormous importance for the policy
implications the causal process among the variables assume. The relevance of investigating the causal relationship between inward FDI and exports borders on the implications of the choice between outward oriented policy and inward looking policy.Utilizing data on Malaysia spanning 1970-2012, this study explores the relationships as well as causal interactions among economic growth, exports and FDI employing vector autoregression model and Toda and Yamamoto (1995) augmented causality test.Results from impulse response function (IRF) analysis shows that both real gross domestic product (GDP) and real FDI have increasing trend of percentage shocks in them causing fluctuations in the real exports over the period of 5-year. However, real exports was found to have dominance of own shock over the period of analysis.Similarly IRF of real FDI shows that flections in the variable are dominated by variations in its own values. However, both real exports and real FDI were found to have significant effect in determining fluctuation in real FDI with real GDP having stronger effect. Finally, we observe very significant effect on fluctuations in real GDP of real FDI and
exports.Over the course of 5 years, it was observed that real FDI and exports dominate fluctuations in the real GDP more than its own shock.Results from the study indicate presence of bi-directional causality between exports and inward FDI.On the causal link between exports and GDP, the study finds evidence of uni-directional causality running from GDP to exports, affirming growth-led exports hypothesis. The study also provides evidence that market size hypothesis holds for Malaysia, as evident by one-way causality from GDP to FDI. |
| first_indexed | 2024-07-04T06:11:05Z |
| format | Article |
| id | uum-19650 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:11:05Z |
| publishDate | 2016 |
| publisher | EconJournals |
| record_format | eprints |
| spelling | uum-196502016-11-15T08:35:16Z https://repo.uum.edu.my/id/eprint/19650/ Market size and export-led growth hypotheses: New evidence from Malaysia Hassan, Sallahuddin Murtala, Musa HB Economic Theory Exploring the causal relationship among exports, foreign direct investment (FDI) and economic growth is of enormous importance for the policy implications the causal process among the variables assume. The relevance of investigating the causal relationship between inward FDI and exports borders on the implications of the choice between outward oriented policy and inward looking policy.Utilizing data on Malaysia spanning 1970-2012, this study explores the relationships as well as causal interactions among economic growth, exports and FDI employing vector autoregression model and Toda and Yamamoto (1995) augmented causality test.Results from impulse response function (IRF) analysis shows that both real gross domestic product (GDP) and real FDI have increasing trend of percentage shocks in them causing fluctuations in the real exports over the period of 5-year. However, real exports was found to have dominance of own shock over the period of analysis.Similarly IRF of real FDI shows that flections in the variable are dominated by variations in its own values. However, both real exports and real FDI were found to have significant effect in determining fluctuation in real FDI with real GDP having stronger effect. Finally, we observe very significant effect on fluctuations in real GDP of real FDI and exports.Over the course of 5 years, it was observed that real FDI and exports dominate fluctuations in the real GDP more than its own shock.Results from the study indicate presence of bi-directional causality between exports and inward FDI.On the causal link between exports and GDP, the study finds evidence of uni-directional causality running from GDP to exports, affirming growth-led exports hypothesis. The study also provides evidence that market size hypothesis holds for Malaysia, as evident by one-way causality from GDP to FDI. EconJournals 2016 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/19650/1/IJEFI%206%203%20%202016%20971-977.pdf Hassan, Sallahuddin and Murtala, Musa (2016) Market size and export-led growth hypotheses: New evidence from Malaysia. International Journal of Economics and Financial Issues, 6 (3). pp. 971-977. ISSN 2146-4138 http://www.econjournals.com/index.php/ijefi/article/view/2583 |
| spellingShingle | HB Economic Theory Hassan, Sallahuddin Murtala, Musa Market size and export-led growth hypotheses: New evidence from Malaysia |
| title | Market size and export-led growth hypotheses: New evidence from Malaysia |
| title_full | Market size and export-led growth hypotheses: New evidence from Malaysia |
| title_fullStr | Market size and export-led growth hypotheses: New evidence from Malaysia |
| title_full_unstemmed | Market size and export-led growth hypotheses: New evidence from Malaysia |
| title_short | Market size and export-led growth hypotheses: New evidence from Malaysia |
| title_sort | market size and export led growth hypotheses new evidence from malaysia |
| topic | HB Economic Theory |
| url | https://repo.uum.edu.my/id/eprint/19650/1/IJEFI%206%203%20%202016%20971-977.pdf |
| work_keys_str_mv | AT hassansallahuddin marketsizeandexportledgrowthhypothesesnewevidencefrommalaysia AT murtalamusa marketsizeandexportledgrowthhypothesesnewevidencefrommalaysia |