Analysing factors affecting the industrial production sector in Malaysia: evidence from the bounds testing approach of cointegration

Gamal, Awadh Ahmed Mohammed

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Type :	article
Subject :	H Social Sciences (General)
ISSN :	1800-5845
Main Author :	Gamal, Awadh Ahmed Mohammed
Additional Authors :	Mohd Asri Mohd Noor
Title :	Analysing factors affecting the industrial production sector in Malaysia: evidence from the bounds testing approach of cointegration

Place of Production :	Tanjung Malim
Publisher :	Fakulti Pengurusan dan Ekonomi
Year of Publication :	2023
Notes :	Montenegrin Journal of Economics
Corporate Name :	Universiti Pendidikan Sultan Idris
HTTP Link :	Click to view web link

Abstract : Universiti Pendidikan Sultan Idris

The main objective of this study is to investigate the factors that affect the Malaysian industrial production sector (IPS) by using the ARDL bounds testing methodology. The analysis is conducted by applying the time series data for the 19702020 period. From the ARDL results, all variables significantly influence Malaysian IPS in different manners for both periods; long and short runs, except the financial development (FD) variable, which insignificantly in-fluences IPS. This final result was verified by the ECM estimate, indicating the presence of long-and short-run relationships between IPS and its factors. Although the FD sector does not directly play a significant factor in stimulating Malaysian IPS growth, policymakers must revise their policies to enhance the role of the financial and banking sector in strengthening the IPS performance in the country. This revision can be done by running good financial services to fund and motivate investors to construct new IPS schemes and then enhance the Malaysian economy with a higher growth position in the future. 2023, Economic Laboratory for Transition Research. All rights reserved.

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