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Production interdependencies and poverty reduction across ethnic groups in Malaysia

M. Yusof Saari, Erik Dietzenbacher and Bart Los

Economic Modelling, 2014, vol. 42, issue C, 146-158

Abstract: Production sectors are interdependent and the benefits of output growth for poverty reduction therefore spread over the economy. The role of such interdependencies is explicitly studied in this paper. A social accounting matrix for Malaysia that distinguishes between the major ethnic groups in Malaysia (Malays, Chinese, and Indians) is used to run the analyses. Interdependencies among production sectors are measured by splitting the total output effect into the initial, direct and indirect effects. The results show that sectors which have large (small) spillover effects are associated with lower (higher) poverty reduction. The best way to increase the income of poor workers in a sector, generally is to stimulate that sector rather than other sectors.

Keywords: Interdependency; Growth; Poverty; Social accounting matrix (SAM); Ethnic groups (search for similar items in EconPapers)
Date: 2014
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