All Research

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.

Abdul Rahim Ridzuan · Vikniswari Vija Kumaran · Bayu Arie Fianto · Mohd Shahidan Shaari · Miguel Ange Esquivias · Aliashim Albani ·International Journal of Energy Economics and Policy ·2022

Over the past forty years, Malaysia has achieved tremendous economic growth because of higher investment from foreigner such as from China, Japan, and US. Many multinational companies (MNC) have allocated their factories especially in more developed state such as Selangor, Penang and Johor to focused on their operation. The country able to receive various benefits from this investment in the form of job creation, advancement in technology, better income distribution and at same time, some negative externalities such as environmental degradation can also take place from those operation. Given this situation, it is interesting to investigate the current state of sustainable development for Malaysia by considering the impacts of FDI. This paper focused on investigating the presence of Environmental Kuznets Curve (EKC) as well as Pollution Haven Hypothesis (PHH) for Malaysia using a latest annual dataset for the period 1971 until 2019. The study used Bound test to determine the impact of FDI and other selected macroeconomic variables on environmental quality proxied by Carbon emission (CO2). The outcomes shows that the country showcased the U shaped of EKC and higher FDI inflows has worsening the country’s environmental pollution. These outcomes posit a bad alarm for the policymakers of the country to be more aware on the consequences of development that cause higher carbon emissions release and how MNC in the country contribute more emissions with make the scenario worsen. Heavy environmental rules should be imposed to foreign investors and the country need to be directing their economic development by following the principles set out by United Nation in pursing sustainable development.

Chia Lin Chang · Yu-Hui Wang · Kuo-I-Chang ·Emerging Markets Finance and Trade ·2022 ·JEL: F14, F10, F61

This study performs survival analysis to evaluate duration of revived and new machinery import and the hazard ratios (HRs) of covariates related to the global financial crisis (GFC) and COVID-19 pandemic in the Association of Southeast Asian Nations (ASEAN). The results indicate that large tariff margins decreased the possibility of disruption (HR: 0.8024) to Japanese import from ASEAN countries after revived during the COVID-19 pandemic and increased the possibility of disruption (HR: 1.0338) to Chinese import from ASEAN countries of new import during the GFC.

Arif Imam Suroso ·Economies ·2022

Palm oil is one of the most traded vegetable oils in the global market due to its versatile usage and having a lower price than competitor products. Trade is related to logistics performance as it connects the exporter and importer countries; thus, improving the indicators of logistics also improves the performance of trade, especially in agricultural export. Currently, no study has revealed the effect of logistics performance on palm oil export by considering all the indicators. This study investigates the impact of all the indicators of the logistics performance index on palm oil and palm-based products. Using a panel data regression approach, the extended gravity model is applied in this study to examine Indonesia and Malaysia as the leading exporters of palm oil and palmbased products. The results reveal that all the Logistics Performance Index indicators affect palm oil and palm-based products export in Indonesia and Malaysia. The critical indicators of the Logistics Performance Index in Indonesia are timeliness and tracking and tracing. However, competence and quality of trade infrastructure are the main indicators of Malaysia’s palm oil and palm-based products. The future direction of this research is to explore other agricultural commodities and extend the period of the analysis.

Izaan Jamil · Mori Kogid · Thien Sang Lim · Jaratin Lily ·Economies ·2022

This paper investigates the impact of soybean and crude oil futures on palm oil indexes by utilising monthly data from three palm oil indexes listed in Bursa Malaysia, i.e., the Asian palm index, Malaysian palm index, and Plantation index, spanning from January 2010 to June 2020. The impacts were analysed using the Autoregressive Distributed Lag (ARDL) bounds test approach and causality test. The statistical findings revealed that the Asian palm index has a long-run relationship with crude oil futures and crude palm oil, and a short-run relationship with soybean futures, crude oil futures, and crude palm oil. On the other hand, the Malaysian palm index has a short-run relationship with soybean futures and crude palm oil, whereas the Plantation index has a short-run relationship with crude oil futures, crude palm oil, and exchange rate. For the long-run strategy, this study recommends close monitoring of crude oil futures. Meanwhile, the short-run strategy requires close monitoring of the crude oil and soybean futures. Eventually, the empirical findings proposed that interested parties such as fund managers, investors, and traders should pay attention to crude oil and soybean futures to mitigate risk and diversify their portfolios with greater emphasis on crude oil futures.

Noor Zahirah Mohd Sidek · Bhuk Kiranantawat · Martusorn Khaengkhan ·Economies ·2022

In the present paper, we show how uncertainty emanating from fluctuations in economic uncertainty, news-based uncertainty, and geopolitical risks affect the number of containers exported from Thailand via Penang Port, Malaysia. Our sample extends from January 2009 to May 2020 from three main entry points in the Northern Peninsular Malaysia–Thailand Border: Padang Besar, Surat Thani, and Bukit Kayu Hitam. Two modes of transportation of containers are mainly used for export purposes, namely, road and rai. This study examines the nonlinear effect of uncertainty on trade by employing a two-regime Markov regime-switching approach. The empirical results show that, overall, uncertainty significantly affects the movement of containers in the high-uncertainty regime. Therefore, small ports must continue to diversify their client base to cushion the impact of fluctuations in global trade due to uncertainty

Edward B. Barbier ·Economic Analysis and Policy ·2022

Rural transformation is a process of comprehensive societal change whereby countries diversify their economies and reduce their reliance on agriculture and other primary product industries. “Greening” rural transformation implies making this process of structural change and economic diversification less environmentally damaging, including reducing dependency on fossil fuels and carbon emissions. To be successful in Asia-Pacific emerging and economies, such a transformation must be compatible with the most important development goal, which is poverty alleviation. This includes reducing poverty levels as well as related objectives, such as increasing access to energy, safe water and basic sanitation. An additional policy challenge is that many developing and emerging economies in the region remain highly dependent on primary products for exports, GDP and employment, and these activities are accompanied by significant land use change, especially for tropical countries. In a post-COVID world, emerging and developing countries will need to find cost-effective and innovative policy mechanisms to achieve sustainability and rural transformation aims in the absence of significant infusions of additional financing from major economies and international organizations. This article identifies affordable policies that can yield progress towards several development goals together, rather than sacrificing some goals to achieve others. Three policies meet these criteria: a fossil fuel subsidy swap to fund clean energy investments and dissemination of renewable energy in rural areas; reallocating water subsidies to expand water supply and sanitation services for the rural poor; and using proceeds from a carbon tax to fund natural climate solutions.

Amir Lebdioui ·Review of International Political Economy ·2022 ·JEL: B5; L7; O11; O13; O14; O53; Q17

This article investigates the role of industrial policy in promoting upgrading in commodity sectors by examining the case of the petroleum, rubber, and palm oil industries in Malaysia. By doing so, it aims to contribute to an emerging scholarship that bridges the developmental state and the global value chains literature. Several findings emerge from this study. First, linkages do not unfold through market forces alone. Commodity value addition processes can be hindered by a range of barriers, including power dynamics alongside global commodity chains. The existence of high barriers for linkage development in developing nations justifies the need of state interventions. Second, successful government interventions for commodity value addition in Malaysia have gone far beyond fixing market failures and a ‘facilitative’ role of the state. Instead, the productive capabilities necessary for value addition were accumulated through coherent industrial policies and the strategic orientation of rents towards achieving productivity gains and learning. Third, political considerations, such the base of the ruling coalition, the regime type (marked by both executive dominance and political competition), and the influence of the regional intellectual climate, are essential to understanding both the policy will and ability to pursue a developmental approach towards commodity value addition.

Rahmat Heru Setianto · Rani Septiani Sipayung · W.N.W. Azman-Saini ·Entrepreneurial Business and Economics Review ·2022

The objective of the article is to empirically investigates the role played by financial development in determining the relationship between working capital financing and firms’ performance. Employing data of publicly listed manufacturing firms in five ASEAN countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand spanning from 2009-2018 resulted in 6,183 firm years observation. This study conducts an analysis using the two-steps generalized method of moments (GMM) estimator. The inverted U-shape effect of working capital financing on firm profitability is confirmed, indicating a trade off in utilizing short-term debt to finance working capital requirements. Moreover, new evidence was shown that firms which operate in more financially developed regions have the opportunity to utilise a greater percentage of short-term debt without destroying their profitability.

AHMAD FAHMI SHEIKH HASSAN · ADI FAZULI MAMAT · YUSUF KARBHARI · MUSLIM HAR SANI MOHAMAD ·International Journal of Economics and Management ·2018 ·JEL: M42; M41;G34

This study examines the effectiveness of an Audit Committee (AC) operating in a large government statutory body in an emerging economy, namely the Inland Revenue Board of Malaysia (IRBM). This study is timely, as previous studies focussing on AC effectiveness in relation to the public sector are sparse. Data collection was through in-depth interviews with key individuals involved in the IRBM governance process, including AC members, senior management and external auditors. The study finds existence of a weak AC governance function that inadequately oversees financial reporting and internal control systems. We find the independence of AC members questionable, as a communication gap exists between AC members and the external auditor. In particular, the study highlights that top management should ensure that its AC fulfils its assigned role and that urgent attention is given to issues on composition, appointment and diligence of its AC members. We conclude that the IRBM should consider improving independence by appointing an external independent AC member(s) from either the big four or an influential industry expert to provide the necessary input and expertise to ensure that public confidence continues.

SOH WEI NI · ANNUAR MD NASSIR · CHENG FAN FAH ·International Journal of Economics and Management ·2018 ·JEL: M42; M41

A corporate cash holding is significant element in the cash and liquidity management. Corporations with higher excessive cash reserves will benefit when high liquidity makes it easier for managers to transfer funds among several of the corporations’ expenses and debts, and allows for more flexibility in managing daily operational activities. However, it raise some issue as firm with higher cash holdings tend to explore to higher agency cost due to the conflict of interest between ownership and management. This study employs data envelopment analysis (DEA) estimation and two-stage regressions model. The findings conclude that the firm size, firm growth, and gross domestic product (GDP) are statistically significant for firm efficiency in both markets. The cash holdings help improve firm efficiency as the adjusted R-square is significantly increased for all models. However, the cash holdings are not related to the efficiency of high-cash holding firms for these two stock exchanges. The contribution of cash holdings to firm efficiency is higher, and even double for a developed market compared with a developing market (Bursa Malaysia), which shows that the development stage of a country impacts on cash holdings’ contribution to firm efficiency.

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.

Norlin Khalid · Hakimah Nur Ahmad Hamidi · Sharmila Thinagar · Nur Fakhzan Marwan (Universiti Teknologi MARA (UiTM) Kedah) ·Jurnal Ekonomi Malaysia ·2018

This paper aims to forecast the performance of crude palm oil price (CPO) in Malaysia by comparing several econometric forecasting techniques, namely Autoregressive Distributed Lag (ARDL), Autoregressive Integrated Moving Average (ARIMA) and Autoregressive Integrated Moving Average with exogenous inputs (ARIMAX). Using monthly time series data spanning from 2008 to 2017, the main results revealed that ARIMAX model is the most accurate and the most efficient model as compared to ARDL and ARIMA in forecasting the crude palm oil price. The results also show that the spot price of palm oil is highly influenced by stock of palm oil, crude petroleum oil price and soybean oil price. The empirical findings provide some insights for decision making and policy implementations, including the formulation of strategies to help the industry in dealing with the price changes and thus enable the Malaysian palm oil industry to continue dominating the international market.

WAN NORHIDAYAH W. MOHAMAD · KEN WILLIS · NEIL POWE ·International Journal of Economics and Management ·2018 ·JEL: Q51; Q57

Accounting for ignored attributes, or attribute non-attendance (ANA), in discrete choice experiment (DCE) is believed to produce more reliable willingness to pay (WTP) estimates. However, there is evidence that respondents who claimed to have ignored some attributes may simply have assigned them lesser importance. To explore this issue in the context of tourism research, a new follow-up question is used to investigate whether the respondents have ignored certain attributes or just assigned the attribute as of lesser importance when responding. Three different mixed logit (MXL) models were estimated and compared. Results generally indicate that some respondents do indeed ignore certain attributes, and some of them put less emphasis on certain attributes when making decisions. Comparison of the different MXL models reveals different WTP estimates, suggesting the importance of considering an appropriate method to deal with ANA.

Yong Kang Cheah · Mohd Azahadi · Noor Hazilah Abd Manaf · Siew Nooi Phang ·Malaysian Journal of Economic Studies ·2018

A sharp rise in the prevalence of suicide has become a serious public health concern. Acquiring a better understanding of the determinants of suicidal behaviour can help to implement a more effective policy directed towards reducing the suicide rate. In this study, we attempt to examine the effects of sociodemographic, lifestyle and health factors on suicidal behaviour among Malaysian adults. A rigorous statistical method and a nationally representative data are used for analyses. We find that age, gender, race, marital status, self-rated health, diabetes and hypercholesterolemia are significantly associated with suicidal behaviour. Specifically, there are positive relationships between the likelihoods of engaging in suicidal behaviour and young adults, females, Indians/others, being unmarried, and having poor health conditions. We conclude that sociodemographic and health factors play an important role in affecting suicidal behaviour, whereas lifestyle factor does not. As an intervention measure towards overcoming the problem of high suicide rate, effective policies should be targeted at individuals who are likely to engage in suicidal behaviour.