Industry Concentration in Rich and Poor States in Malaysia: Location Quotient and Shift Share Analyses

Muzafar Shah Habibullah () and Alias Radam

The IUP Journal of Journal of Industrial Economics, 2009, vol. VI, issue 1, pages 56-65

Abstract: For the last five decades, disparity in income across states in Malaysia has continued to be a matter of concern. The existence of regional disparities and the prospect that these may widen were recognized by the Malaysian government. The eight volumes of the Five-Year Malaysia Plan reflects the sincerity of the Malaysian government in eradicating the problem of regional or states imbalances. The Ninth Malaysia Plan, the South Johor Economic Region (SJER) and the more recent North Corridor Economic Region (NCER) are all intended to narrow the gap between regional income disparities in Malaysia. Using the annual data for the period 1970 and 2000, and using the location quotient and the standard shift share method of analysis, we found out that poor states (Kedah, Perlis and Kelantan) are characterized by economic activities mainly concentrated in the agriculture sector, while for the richer states (Penang, Selangor and Wilayah Persekutuan), the manufacturing sector is the main contributor to the economic growth.

Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:icf:icfjie:v:06:y:2009:i:1:p:56-65

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