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Export Diversification and Economic Growth in Malaysia

Author

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  • Arip, Mohammad Affendy
  • Yee, Lau Sim
  • Abdul Karim, Bakri

Abstract

This paper examines the relationship between export diversification and economic growth in Malaysia. We use annual data from 1980-2007 and time-series techniques of cointegration and Granger causality tests to examine the long-run relationship and dynamic interactions among the variables. The results show the presence of a unique cointegrating vector among the four variables. Consistent with previous studies, we found that export diversification plays significant roles to economic growth in Malaysia. This finding suggests that, in order to sustain future economic growth under the static effect of multilateral and regional trade liberalization, Malaysia should diversify its export commodities and develop greater social and economic cooperation with the rest of the world. As an export-oriented economy, in the long run, export diversification strategy could help stabilizing Malaysia’s export earnings.

Suggested Citation

  • Arip, Mohammad Affendy & Yee, Lau Sim & Abdul Karim, Bakri, 2010. "Export Diversification and Economic Growth in Malaysia," MPRA Paper 20588, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20588
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    References listed on IDEAS

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    Cited by:

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    2. Dahmani, Mounir, 2021. "Impact de la diversification des exportations sur la croissance économique: Cas de la Tunisie [Impact of export diversification on economic growth: case of Tunisia]," MPRA Paper 112225, University Library of Munich, Germany, revised 2021.
    3. Dr. Aranilyar C. Isukul & Dr. John J. Chizea & Dr. Ikechi Kelechi Agbugba, . "Economic Diversification in Nigeria: Lessons from other Countries of Africa," Journal of Economic and Sustainable Growth 3, Office Of The Chief Economist, Development Bank of Nigeria.
    4. Xiaozhen Qin & Shan Li & Weipan Xu & Xun Li, 2019. "Which Export Variety Matters for Urban Economic Growth, Related or Unrelated Variety?," Sustainability, MDPI, vol. 11(16), pages 1-19, August.
    5. Gulmira Azretbergenova & Aziza Syzdykova, 2020. "The Dependence of the Kazakhstan Economy on the Oil Sector and the Importance of Export Diversification," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 157-163.
    6. Coulibaly, Romaric & Akia, Sosthène Alban, 2019. "Export structure and economic growth in a developing country: case of Cote d’Ivoire," MPRA Paper 94116, University Library of Munich, Germany.

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    More about this item

    Keywords

    export diversification; economic growth; revealed comparative advantage;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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