Tourism, real output and real effective exchange rate in Malaysia: a view from rolling sub-samples

The objective of this study is to examine the tourism-growth nexus for Malaysia with the cointegration and Granger causality tests. This study covers the monthly data from January 1989 to May 2010. The Johansen’s cointegration and the residuals-based test for cointegration with regime shift consistently suggest that tourist arrivals, real output, and real effective exchange rate in Malaysia are cointegrated. In terms of Granger causality, this study finds different sources of causality. In the short run, real output and real effective exchange rate Granger-cause tourist arrivals, while tourists arrivals also Granger-cause real output and real effective exchange rate. In the long run, this study shows that all the variables are bi-directional causality. Moreover, we also extend the study to analyse the stability of causality between tourism and real output by using rolling regression procedure into the Granger causality test. Interestingly, the rolling Granger causality test demonstrates that the growth-led tourism hypothesis is valid and stable, while tourism-led growth hypothesis is valid and but unstable in particular after 2005. Although tourism contributes to economic growth, it is not a persistence source for long-term economic growth in Malaysia.tourism-led growth hypothesis; Malaysia; rolling regression

The stability of money demand function in Japan: Evidence from rolling cointegration approach

The main purpose of this study is to re-investigate the stability of Japanese M2 money demand function over the period of 1960:Q1 to 2007:Q2. This study propose to incorporate the rolling regression approach into the bounds testing procedure for cointegration within the autoregressive distributed lag (ARDL) framework to search for the stability of money demand function in Japan. This study, in general, confirms that real M2 money demand and its determinants, real income and interest rates are cointegrated within the entire sample period. In line to that, the CUSUM and CUSUM of Squares tests show that the money demand function is stable over the analysis period. However, the evidence of rolling ARDL cointegration test implies that Japanese M2 money demand is not stable due to a series of changes in the Japanese monetary policy environment. The finding of this study is vital for policymakers in formulating an appropriate macroeconomic policy. Owing to the low power of CUSUM and CUSUM of Squares tests in the presence of lagged dependent variable(s), this study propose to use the rolling cointegration test to re-investigate the stability of money demand function in Japan.Money Demand; Rolling Cointegration Test; Japan; Stability

A re-examination of the role of foreign direct investment and exports in Malaysia's economic growth : a time series analysis,1970-2006

The main objective of this study was to re-examine the role of foreign direct investment(FDI)and port Malaysia's economic growth over the period of 1970 to 2006.The Johansen and Juselius(1990) cointegration test was used to investigate the presence of a long-run equilibrium relationship between economic growth and its determinants. Besides, the vector error correction model (VECM) and the Granger (1969) causality test were used to examine the short-and long-run causality direction between the relevant variables. The empirical results revealed that economic growth and its determinants were cointegrated. The Dynamic OLS results suggested that FDI and exports were positively related to economic growth. In addition,the Granger causality results strongly supported bilateral causality between economic growth and its determinants. This indicated that FDI and exports contribute to Malaysia’s economic growth. In fact, high economic growth will also cause FDI and export-orientated industries to grow rapidly

The dynamic relationship between private domestic investment, the user cost of capital, and economic growth in Malaysia

This study attempts to examine the dynamic relationship between private domestic investment (PDI), the user cost of capital, and economic growth in Malaysia over the period of 1970 to 2009. Johansen cointegration test suggests that PDI, the user cost of capital, and economic growth are cointegrated in Malaysia. Granger causality test reveals that there is a uni-directional causality running from PDI to economic growth and also from PDI to the user cost of capital in the long run. Moreover, there is a bi-directional causal relationship between economic growth and the user cost of capital in the long run. Meanwhile, there is a strong evidence of a bi-directional causality between PDI, economic growth, and the user cost of capital in the short run. For completeness, variance decomposition is also generated and the results suggest that PDI is more important than the user cost of capital in explaining the variation of economic growth. Finally, the impulse response function confirmed that a shock in the user cost capital exerts a negative effect on PDI and economic growth in Malaysia.Causality; Cointegration; Economic growth; Private domestic investment

The role of socio-demographic factors on self-rated happiness: The case of Malaysia

This study examines the role of socio-demographic determinants on individual’s level of happiness. Primary survey data on Penang, Malaysia is used for analysis. Based on the findings, being married and Malay are associated with higher probability of feeling very happy or happy. Nevertheless, individuals who suffer from chronic diseases are more likely to have unhappy or very unhappy feelings. The rest of the factors such as income, education, age, gender, and employment status are found to have insignificant effects on happiness. Several policy implications can be recommended based on the outcomes.Education; Health; Happiness; Income; Malaysia; Well-being

THE EFFECTS OF DISAGGREGATED SAVINGS ON ECONOMIC GROWTH IN MALAYSIA - GENERALISED VARIANCE DECOMPOSITION ANALYSIS

This study examines how much of the variance in economic growth can be explained by various categories of domestic and foreign savings in Malaysia. The bounds testing approach to cointegration and the generalised forecast error variance decomposition technique was used to achieve the objective of this study. The cointegration test results demonstrate that the relationship between economic growth and savings in Malaysia are stable and coalescing in the long run. The variance decomposition finding indicates that economic growth in Malaysia is dominated by domestic savings such as private and public savings. However, the effect of foreign savings on economic growth is relatively insignificant.Cointegration; Disaggregate savings; Growth; Generalised variance decomposition; Malaysia

Temporal Granger causality and the dynamics examination on the tourism-growth nexus in Malaysia

This study applied the cointegration, error-correction modelling and persistence profile to analyse the dynamic relationship between real tourism receipts, real income and real exchange rate in Malaysia. This study covers the annual sample period from 1974 to 2009. This study finds that the variables are cointegrated. In the short run, this study finds that neutrality causality between real tourism receipts and real income, while they are bi-directional Granger causality in the long run. Nevertheless, this study finds uni-directional causality running from real exchange rate to real tourism receipts and real income in both short- and long run.Causality; Exchange rate; Malaysia; Tourism-led growth; Persistence profile

Is inflation always a monetary phenomenon in Malaysia?

The purpose of this study is to empirically re-investigate the money-prices nexus for Malaysia through the cointegration and causality techniques. This study covered the monthly data from 1971:01 to 2008:03. The Johansen cointegration test suggests that the variables are cointegrated. Furthermore, the MWALD test shows a unidirectional causal relationship run from money supply (M2) to aggregate prices, meaning that only the monetarist’s view exist in the Malaysian economy. However, the time-varying causality tests indicate that inflation is not always a monetary phenomenon in Malaysia. Therefore, the contractionary monetary policy may not an effective instrument in managing inflationary behaviour in Malaysia.Inflation; Money; MWALD test; Recursive regression; Rolling regression

An Empirical Study on Malaysian IPOS and Their Profit Forecasts

This paper is divided into two parts. The first part examines the trend of IPO's premiums and accuracy of profits forecasting in short run and long run. The second part examines the reputation of underwriters and size of auditors as possible determination of IPO's premium and accuracy of profits forecasting. Two hundred and forty-five new issues were analysed for the period 1993-1996. There are significant excess returns on the first day of trading with an average premium of 88 per cent. The first day IPO's premiums have a significant effect of two difference economy period. The average first day premium is about 104 per cent in the economy boom period (93-94) compared to 66 per cent in the post boom period. The results on profit forecast error showed reasonable accuracy of forecasts with an error of -2.72 per cent. Looking at the reputation of underwriters, size of auditors and the first day IPO's premium. The size of auditors and reputation of underwriters are not the determinate of the first day IPO's premium. From a sample of 137 companies after screening for outliers, 62 companies under-estimated and 75 over-estimated their profit forecasting. There is no statistically significant relationship between reputation of underwriter and size of auditor with the accuracy of profit forecasts

Usage Of Smart Card E-Payment In Public Transportation And Other Enterprises. An Empirical Study In Penang

Kad pintar hari ini digunakan di seluruh dunia sebagai kad pengenalan peribadi untuk akses komputer peribadi peralatan kawalan dan sistem keselamatan bangunan korporat. Today smart cards are used all over the world as personal identification cards for personal computer equipment access control and corporate building security systems