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Investigating the Causal Relationship between Export and Economic Growth: A Malaysian Perspective

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  • Diana Nabila Chau Abdullah
  • Mohd Shahidan Shaari
  • Nor Ermawati Hussain

Abstract

Export is perceived to be an important factor of economic growth in numerous countries irrespective of their economic status whether they are developing or developed. Economic growth is also regarded as a determinant of export in various countries. These two issues have attracted researchers to investigate the bidirectional relationship between export and economic growth. However, most of them found a unidirectional relationship. Therefore, this study attempts to prove the existence of a bidirectional relationships between export and economic growth in Malaysia. Annual data on export, GDP, employment and fixed capital formation were collected and analysed from 1984 to 2014. The Vector Autoregressive Model (VAR) was employed and the findings show that there is a bidirectional relationship between export and economic growth in Malaysia. Therefore, a rise in export can boost economic growth and vice versa.

Suggested Citation

  • Diana Nabila Chau Abdullah & Mohd Shahidan Shaari & Nor Ermawati Hussain, 2017. "Investigating the Causal Relationship between Export and Economic Growth: A Malaysian Perspective," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(7), pages 581-591, July.
    • Handle: RePEc:hur:ijarbs:v:7:y:2017:i:7:p:581-591
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    References listed on IDEAS

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    1. Sunde, Tafirenyika, 2017. "Foreign direct investment, exports and economic growth: ADRL and causality analysis for South Africa," Research in International Business and Finance, Elsevier, vol. 41(C), pages 434-444.
    2. Sunde, Tafirenyika, 2016. "Foreign direct investment and economic growth: ADRL and causality analysis for South Africa," MPRA Paper 72382, University Library of Munich, Germany, revised Jun 2016.
    3. Shafiullah, Muhammad & Selvanathan, Saroja & Naranpanawa, Athula, 2017. "The role of export composition in export-led growth in Australia and its regions," Economic Analysis and Policy, Elsevier, vol. 53(C), pages 62-76.
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    Cited by:

    1. Amir Iqbal & Xuan Tang & Samma Faiz Rasool, 2023. "Investigating the nexus between CO2 emissions, renewable energy consumption, FDI, exports and economic growth: evidence from BRICS countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(3), pages 2234-2263, March.
    2. Bakari, Sayef & Khalfallah, Sirine & Zidi, Ahmed, 2021. "The Determinants of Agricultural Exports: Empirical Validation for the Case of Tunisia," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 9(3), October.

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