Research

Sotheeswari Somasundram · Murali Sambasivan · Ratneswary Rasiah · Tee Pei-Leng ·Institutions and Economies ·2018 ·JEL: 053; R11; C43; J130; 018

The urban community in Malaysia is facing rapid urbanisation and have been the beneficiary of urban development policies. The key purpose of these policies has been to enhance and improve the well-being of the urban community. However, given the diverse nature of urban planning, literature has highlighted the possibility of a mismatch between policy directions and the outcomes desired by society. The aim of this study is therefore, to determine whether urban policy measures currently implemented in Malaysia are in sync with the needs of society. This study applied the relative importance index (RII) method tounderstand the challenges faced by urban residents in Kuala Lumpur, Selangor, Malacca and Penang. The results revealed five challenges which are of concern to the urban community: prevalence of crime, rising cost of living, lack of employment opportunities, air pollutionandtraffic congestion. The findings indicate Government policies are addressing these concerns. However, for a more effective outcome, the study recommends designing urban policies in consultation with civil society.

Guohui Chen · Jie Zhang ·Emerging Markets Finance and Trade ·2022

The ASEAN countries are in a golden stage of development, although the uneven regional development remains a prominent challenge to integrated growth. The study tries to investigate regional inequality in ASEAN countries from an outer space perspective. It first estimates the relationship between nighttime light intensity and GDP per capita for the 10 ASEAN countries at the national level, based on which it predicts regional incomes at the subnational level to assess regional inequality and explores the affecting factors. The results indicate that regional inequality in the ASEAN region and economic development present an inverted N-shaped relationship. The overall inequality of the region is largely attributed to the uneven development between countries. It is also found that transportation, urbanization, openness, mineral rents, and tax revenue are all significantly relevant to regional inequality.

Mohd Azlan Shah Zaidi · Zulkefly Abdul Karim · Noor Amirah Zaidon ·Economies ·2022

Movements in palm oil price give important signals to various stakeholders of the palm oil industry in Malaysia. Thus, understanding external and internal factors that may affect the palm oil price is vital to the industry players for sustainability of their activities. This study investigates relative importance of external and internal shocks on the movement of palm oil price in Malaysia. Employing a structural vector autoregressive (SVAR) model on quarterly data from 1990 to 2019, the findings reveal that external shocks are more dominant in affecting the palm oil price. Shocks to the crude oil price, the prices of substitution goods (soybeans oil, rapeseed oil, and sunflower oil), the world palm oil price, and foreign income significantly affect the palm oil price in the short and medium run. The results also indicate that a shock to soybean oil price has a more profound effect on the palm oil price than a shock to rapeseed oil or sunflower oil prices, respectively. Likewise, shocks to incomes from India as well as from Netherlands create greater impacts on the palm oil price than a shock to income from the other trading partners, respectively. The study has shown the importance of external factors in affecting the palm oil industry.

Hon Chung Hui ·South Asian Journal of Macroeconomics and Public Finance ·2021 ·JEL: F31, D72, D73, O38

This article explores the effects of political events on foreign exchange returns in Malaysia. We identify five political events in recent history, namely the 13th General Election (GE13), the imprisonment of a key opposition politician, the scandal from the 1MDB exposé, the appointment of a new Central Bank Governor and the 14th General Election (GE14). Using event studies, our findings show that the imprisonment of the opposition party leader triggered a favourable response from the foreign exchange market. However, market reactions to the 1MDB scandal were largely unfavourable. The GE13 triggered unfavourable market response, while the reverse is true for market reactions to GE14. Market response to the appointment of the new Central Bank Governor was rather positive. The Event Study is the first of its kind that examines the foreign exchange market implications of key political events in Malaysia. There are practical considerations that emanate from these findings.

Muhammad Safuan Abdul Latip · Farhana Tahmida Newaz · Rachel Yong Yuen May · Ahmad Esa Abdul Rahman ·Journal of Asian Finance, Economics and Business ·2021 ·JEL: Q56, M39, D16, Q01, M59

The study investigated the effect of food safety knowledge, food safety trust and the factors influencing organic food purchase intention in the ‘new normal’ of the COVID-19 pandemic. The study employed non-contrived and cross-sectional methods. The data was collected in Malaysia using convenience sampling. A total of 330 valid questionnaires were analyzed using Structural Equation Modelling (SEM) and PROCESS for hypothesis testing. The study revealed a significant relationship involving food safety knowledge on personal attitude, perceived social pressure, and perceived autonomy. Moreover, organic food purchase intention was found to be influenced by personal attitude, perceived social pressure, and perceived autonomy. Interestingly, trust in organic food safety moderated the relationship between perceived autonomy and organic food purchase intention. The study proved valuable for stakeholders and organic food producers to understand the ‘new normal’ COVID-19 market scenario for a sound understanding of the market and the sustainability of the organic food industry. A new research framework is proposed and validated, related to individual purchase decision in global health issues which is limited in current literature. Hence, the study contributed to a better comprehension of green consumerism mainly in the Asian market.

Mohammad Shahansha Molla · Mohammad Tariq Hasan · Mahadi Hasan Miraz · Mohammad Tahlil Azim · Md. Kaium Hossain ·Journal of Asian Finance, Economics and Business ·2021 ·JEL: M1, M4, M48, Q56

This study aims to examine the relationship between directors’ diversity (DIRDIV) and financial performance (FP) with a particular focus on the moderating effect of corporate sustainability practices (CSP). The study analyzes a sample of 104 firms listed on the Bursa Malaysia for the period from 2015 to 2017. Directors’ diversity is measured by the Blau index, and Tobin’s Q is used as a proxy of FP of the firms while the content analysis method is adopted to measure CSP. The study also employs three control variables, namely, board size, firm size, and leverage. Panel corrected standard errors (PCSE) estimator model has been used to test the hypotheses by STATA software. It is found that directors’ diversity in terms of independent and non-independent directors significantly and positively affect the financial performance of the firms. Furthermore, this study reveals that CSP significantly moderates the relationship between directors’ diversity and financial performance. This study suggests that the government and regulatory bodies should put more emphasis on diversifying the board and follow up the mandatory CSP to enhance financial performance of the firms, which is likely to ensure their long-term survival and to reduce the risk of collapse in the future.

1 KHAIRI FAIZ MAZRI · RINA FADHILAH ISMAIL (Universiti Teknologi Mara (UiTM)) · ROSHAYANI ARSHAD (Universiti Teknologi Mara (UiTM)) · SITI AISYAH KAMARUZAMAN (Universiti Teknologi Mara (UiTM)) ·International Journal of Economics and Management ·2018 ·JEL: C63; G21

An increase in the number of Shariah-compliant companies in Malaysia has greatly contributed to stabilising the Islamic Capital Market (ICM). The aim of this study is to examine the nature and extent of Islamic Social Reporting (ISR) practices among Shariah-compliant companies listed on the ACE Market in Malaysia. The study also examines the potential existence of a relationship between corporate governance attributes and ISR. The study focuses on four attributes of corporate governance: Shariah supervisory board size, Audit quality, Audit committee and Muslim ownership. A sample was selected comprising 53 Shariah-compliant companies listed on the ACE Market of Bursa Malaysia during the three-year period of 2015–2017. The study uses content analysis, with ISR coded according to a modified Islamic Social Disclosure Index. The results show significant relationships between the corporate governance attributes of board size, audit quality and audit committee, and ISR. This may reflect the benefits of having more board members with a range of expertise and experience in terms of the ability to make better reporting decisions. The appointment of auditors from the Big 4 firms indicates more transparent reporting practices, while an audit committee, serving as a management watchdog, may encourage more transparent reporting in annual reports. The findings may help to strengthen the understanding of parties such as regulators, practitioners and potential investors of the attributes of effective governance among growing companies in Malaysia.

Rahmah Ismail · Syahida Zainal Abidin · Mohd Nasir Mohd Saukani ·Jurnal Ekonomi Malaysia ·2019

Worker’s quality is very crucial to enhance effciency level in an organisation. Workers of high quality are always associated with high effciency and productivity, which subsequently increase competitiveness of an organization. In the Malaysian context, technical effciency in the manufacturing sector is vital to be observed due to its signifcantly high contribution to Gross Domestic Product (GDP). In addition, this sector has rapidly created employment opportunities and listed under National Key Economic Area (NKEA). Worker’s quality can be measured using several methods, which are generally based on human capital achievement. The measurements that are frequently used in the literature are level of educational attainment and worker’s job category. However, these measurements ignore the role of wages, which refect workers productivity when examine its effect on technical effciency. This paper aims to analyse level of worker’s quality or referred as effective worker using composite measurement and examine its impact on technical effciency for the Malaysian manufacturing frms. Analysis is based on 1077 manufacturing frms in 2009 obtained from the Department of Statistics Malaysia, through the Survey of Manufacturing Industries 2010. The fndings show that level of effective workers and technical effciency for the manufacturing frms are still at the moderate level and even low for the micro-sized frms. The main determinants of technical ineffciency are effective workers, ICT expenditure, training expenditure and R&D expenditure. The results suggest that the manufacturing frms should enhance their human capital investment and increase their expenditure especially on training and R&D in order to increase its effciency.

Kean-Siang Chng · Suresh Narayan ·Journal of the Asia Pacific Economy ·2021

The presence of a beauty premium in the labor market has been convincingly demonstrated in developed countries, although studies examining this issue in other countries have been few. Additionally, two related issues remain unclear: (i) Does the beauty premium have the same effect on the preferences of male and female personnel in charge of hiring? (ii) Does the interaction of attractiveness with creativity influence their evaluation differently? This study investigates the issues above in the context of a non-western country. A field experiment was conducted and the data were analyzed using regressions to test the interaction of the three factors (attractiveness, creativity and gender). We found that in common with findings elsewhere beauty is still used to decide who to hire, when no additional information is available, regardless of the gender of the hiring personnel. However, when information on creativity becomes available, male hirers give priority to it while female hirers continue to emphasize good looks. The reasons for this difference and whether or not this finding is unique to Malaysia are worth investigating in future studies.

Maya Puspa Rahmana · Nurfatihah Senusia ·Malaysian Journal of Consumer and Family Economics ·2019

This study explores the understanding, role and participation of the SMEs on digital economy, in line with the aspiration by the Malaysian government to have higher growth contribution coming from this segment. The primary data is collected from a semi-structured interview with six SMEs around Klang Valley from various industries and the analysis is conducted using coding and thematic analysis. Most of the SMEs interviewed are aware on the importance of online presence but lack the understanding on its contribution towards digital economy. While a high number of them are ready to embrace technology driven tools for sales, several others are still quite skeptical and facing difficulties in related cost management. This paper aims to offer specific insights from the SMEs on digital economy and the Malaysia’s move towards adopting the relevance of the fourth industrial revolution. It also identifies some of the issues to be tackled by the government in order to have more SMEs participation in the Malaysian digital economy.

Muralitharan Paramasua · Evelyn S. Devadason · Pardis Moslemzadeh Tehrani ·Millennial Asia ·2021

This article investigates policy constraints for the environmental goods sector in Malaysia based on the dimensions of market-based (including regulatory) instruments and trade policies. In-depth structured interviews with the government and key industry players are conducted, and six overarching themes constraining the efficacy of the instruments and policies were identified. The findings suggest that incentives and loans for this sector are skewed to manufacturers and low-risk projects, respectively. The major policy gaps in this sector are mostly related to procedural issues, namely non-transparent information, non-uniformity of requirements and complex documentation for certification, licensing and permits.

Ooi Kok Loang · Zamri Ahmad ·Millennial Asia ·2022

This study examines the existence, tendency and determinants of herding in the Malaysian stock market under market stress from 2016 to 2020. This study adopts ordinary least square and quantile regression models to estimate herding. Three types of measurements are used to capture volatility, which are realized volatility, Parkinson volatility and Garman and Klass volatility. The result shows that herding exists in the Malaysian stock market. Investors are observed to herd stronger in the bearish (down) market condition compared to bullish (up) market condition, especially in the upper quantile (τ > 50%). Realized volatility is found to be significant in every quantile except for the median quantile (τ = 50%) and Garman and Klass’s volatility is significant in the upper quantiles of 0.75 and 0.90. This study assists analysts and investors to formulate better investment strategies. Regulators and policymakers shall also control and regulate the herding behaviour of investors, which can deviate the stocks from their fundamentals. The existence of herding also violates the assumptions of EMH in assuming that investors are rational.

Zuraini Anang · Jaharudin Padli · Noorhaslinda Kulub Abdul Rashid · Roseliza Mat Alipiah · Haslina Musa ·Jurnal Ekonomi Malaysia ·2019

Water becomes a crucial issue in the 21st century because of rising population and increasing development. Water is needed for agriculture, energy production, recreation, and manufacturing. This study investigates the impact of economic indicators and climate change on water demand for 13 states in Malaysia. Using annual data from 2007 to 2015, the panel data approach is used to assess the impact of these determinants on water demand. The dependent variable is water resources, and independent variables comprise real income, total consumption per capita, agriculture sector, population density and climate change. The real income is a nonlinear equation and indicates a threshold in economic development because the welfare of residents and industry will decline after the optimum point due to the shortage of water resources. The results indicate that total consumption per capita, agriculture, and population density have a positive impact on water demand. The agriculture sector exerts high demand on water resources. The climate change is a correct sign that represents an increase in demand for water resources during dry periods and leading to water stress. This fnding is useful for improving the prediction of climate change to managing the water resources sustainably, particularly in the agriculture sector

J.S. Keshminder · Gurmit Kaur Bariam Singh · Zainora AB. Wahid · Mohammad Syafiq Abdullah ·Malaysian Journal of Consumer and Family Economics ·2019

Green Sukuk serves as an alternative form of finance which is equipped with both climate mitigation and Shariah compliance features compared to conventional finance. Acknowledging the superiority of green Sukuk to raise funds to mitigate climate change, the World Bank took the lead to promote it globally by making Malaysia the premier green Sukuk hub. This study seeks to assess the development of green Sukuk from the aspect of issuance and Shariah principle used in Malaysia since its inception in 2014. The study reveals that the development in the green Sukuk market is slow but is robust in moving from the energy industry to the building industry, while Shariah contracts used are based on the issuers' underlying assets. The study concludes that the green Sukuk market is still small and liquidity constraint makes it difficult for investors to gain access. For the government to increase green Sukuk issuance, information about the performance, challenges, risks, and opportunities in the realm of green Sukuk must be made available to both issuers and investors.

Chin-Hong Puah · Choi-Meng Leong · Abu Mansor Shazali · Evan Lau ·Jurnal Ekonomi Malaysia ·2018

BNM has discarded the use of monetary targeting due to the speeding up of financial reforms as the relationship between money and important macroeconomic indicators in Malaysia has weakened. However, the implementation of the interest rate targeting requires the authorities to alter the policy rate recurrently. Alternatively, the authorities may consider monetary targeting, which provides the ease of control of monetary aggregates, provided that a stable demand for money function can be derived. Nevertheless, financial liberalization has greatly affected the stability of money demand. Thus, this study estimated the demand for money function in Malaysia by considering the effect of the financial development in which a Divisia monetary aggregate has been constructed as an alternative measure of money and a monetization variable has been included in the function. The Johansen and Juselius cointegration test and error correction model are utilized to estimate the demand for money function. The empirical findings indicate that a plausible demand for money function is derived using Divisia M2. Furthermore, monetization appears as an important variable that contributes to a stable money demand. The presence of a stable Divisia M2 money demand has reassured the usefulness of monetary aggregate as the indicator for monetary policy purposes. Monetary targeting provides alternative policy target choice for the conduct of monetary policy. Divisia monetary aggregates can also serve as the alternative money measurement apart from the conventional money supply