Kamaruddin, Rohana and Masron, Tajul Ariffin
(2010)
Sources Of Growth In The Manusfacturing Sector
In Malaysia: Evidence From Ardl And Structural
Decomposition Analysis.
Asian Academy of Management Journal (AAMJ), 15 (1).
pp. 1-18.
ISSN 1394-2603
Abstract
The manufacturing industry has been an important sector in the Malaysian economy for
the past three decades. The important role of this industry to the Malaysian economy
today is not only because Malaysia depends substantially on manufacturing for its
foreign exchange earnings, but also because Malaysia is the main exporter of electrical
and electronic products. This study examines the structural changes in the Malaysian
economy by utilising two economics tools, namely, the econometric approach using the
Autoregressive Distributed Lag (ARDL) model and the input-output approach using
Structural Decomposition Analysis (SDA). These two approaches are used to analyse the
sources of growth in the manufacturing sector in Malaysia. From both economic
approaches, ARDL and IO, the results agreed on the importance of the domestic
consumption effect as a source of growth in the economy. The empirical results from this
study are very useful guide to the manufacturing industry for the need to generate more
domestically oriented products.
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