Factors Affecting China’s Tea Exports to Malaysia: An ARDL Analysis

Yanqi Hu and Chin-Hong Puah ()
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Yanqi Hu: Faculty of Economics and Business, Universiti Malaysia Sarawak, Kota Samarahan 94300, Sarawak, Malaysia
Chin-Hong Puah: Faculty of Economics and Business, Universiti Malaysia Sarawak, Kota Samarahan 94300, Sarawak, Malaysia

Agriculture, 2025, vol. 15, issue 17, 1-17

Abstract: This study employed quarterly data spanning from 2005 to 2024 to investigate the factors affecting China’s tea exports to Malaysia using demand theory. The Autoregressive Distributed Lag (ARDL) approach and Granger causality test were applied to examine the long-run and short-run impacts of key variables, including the prices of China’s tea and coffee imported by Malaysia, Malaysia’s GDP, Malaysia’s tea production, and the international oil price. The ARDL bounds testing confirmed the existence of a long-run equilibrium among these variables. The empirical findings revealed that an increase in the price of China’s tea significantly reduced export volumes, whereas Malaysia’s GDP exerted a strong positive influence. The price of coffee exhibited a significantly negative effect, suggesting an unconventional substitution relationship with tea. Both Malaysia’s domestic tea production and the international oil price imposed downward pressures on China’s tea exports. Furthermore, the Granger causality analysis indicated that the price of China’s tea, the price of coffee, and Malaysia’s GDP all exerted short-run effects on China’s tea exports to Malaysia. These findings contribute to the export demand literature and offer implications for policies aiming to enhance bilateral tea trade between China and Malaysia.

Keywords: China–Malaysia tea trade; export factors; ARDL model; Granger causality; demand theory (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2025
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