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Nexus between Macroeconomic Factors and Economic Growth in Malaysia: An Autoregressive Distributed Lag Approach

Author

Listed:
  • Hazalinda Harun
  • Noorain Mohd Nordin
  • Nornajihah Nadia Hasbullah
  • Suraya Hamimi Mastor
  • Rohaiza Kamis
  • Amizatul Hawariah binti Awang

Abstract

This study digs into the complex relationship that exists between the development of GDP in Malaysia and major macroeconomic variables. It is of the utmost importance to gain an understanding of the elements that influence GDP development to reduce the risk of sociopolitical instability. Because nations are becoming more aware of the various elements that could potentially affect economic growth, this study was prompted to determine the precise mechanisms that are at play because of this awareness. This study employs the Autoregressive Distributed Lag (ARDL) methodology to yield robust statistical insights into the nexus between macroeconomic variables and economic growth in Malaysia. We have used quarterly data ranging from the initial quarter (Q1) of 2000 to the last quarter (Q4) of 2020 for our analysis. The findings of this study provide important insights into the dynamic links between GDP growth and the selected macroeconomic determinants. As a result, the findings provide policymakers, academics, and practitioners with significant information that can be used to design economic plans that are informed by relevant data. In addition, this study emphasizes the necessity for future research endeavors to go deeper into this topic, bringing attention to the requirement for new views and the active participation of new academics, politicians, and practitioners. This concerted effort is necessary to promote sustainable economic growth and stability in Malaysia and elsewhere.

Suggested Citation

  • Hazalinda Harun & Noorain Mohd Nordin & Nornajihah Nadia Hasbullah & Suraya Hamimi Mastor & Rohaiza Kamis & Amizatul Hawariah binti Awang, 2023. "Nexus between Macroeconomic Factors and Economic Growth in Malaysia: An Autoregressive Distributed Lag Approach," Information Management and Business Review, AMH International, vol. 15(3), pages 306-313.
    • Handle: RePEc:rnd:arimbr:v:15:y:2023:i:3:p:306-313
    DOI: 10.22610/imbr.v15i3(I).3541
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    References listed on IDEAS

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    3. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    4. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
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