Exports, imports and economic growth in Malaysia

• Main Author: Choo, Pei Wei
• Format: Academic Exercise
• Language: English
• Published: 2015
• Subjects: HF Commerce
• Online Access: https://eprints.ums.edu.my/id/eprint/18536/1/Exports%2C%20imports%20and%20economic%20growth.pdf; https://eprints.ums.edu.my/id/eprint/18536/
• Institution: Universiti Malaysia Sabah

The purpose of this study is to investigate the causal relationship between exports, imports and economic growth in the case of Malaysia empirically. This study also determined the existence of long-run relationship between exports, imports and economic growth of Malaysia. The time series data used in this study are the annual data for real gross domestic products (current U. S. dollar), real exports of goods and services (current U. S. dollar) and real imports of goods and services (current U. S. dollar) as a proxy of economic growth, exports and imports respectively. Annual data of GDP deflator is also used to obtain real GDP, real exports and real imports from their nominal data in this study. The period cover is from 1960 to 2013. All nominal data for variables are obtained from the World Bank Data Online. Methods used in this study are co-integration test and Granger causality test. The results show that there is bidirectional causality among exports and economic growth while no causality among imports and economic growth. Long-run relationship exists among exports and economic growth while it did not exist among imports and economic growth. The results did not support the expectations that both exports and imports have causal relationship towards economic growth, hence suggests that there was probably a multiplicity of factors at work.