Export Diversification and Economic Growth in Malaysia

Mohammad Affendy Arip, Lau Sim Yee and Bakri Abdul Karim

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the relationship between export diversification and economic growth in Malaysia. We use annual data from 1980-2007 and time-series techniques of cointegration and Granger causality tests to examine the long-run relationship and dynamic interactions among the variables. The results show the presence of a unique cointegrating vector among the four variables. Consistent with previous studies, we found that export diversification plays significant roles to economic growth in Malaysia. This finding suggests that, in order to sustain future economic growth under the static effect of multilateral and regional trade liberalization, Malaysia should diversify its export commodities and develop greater social and economic cooperation with the rest of the world. As an export-oriented economy, in the long run, export diversification strategy could help stabilizing Malaysia’s export earnings.

Keywords: export diversification; economic growth; revealed comparative advantage (search for similar items in EconPapers)
JEL-codes: C30 F10 (search for similar items in EconPapers)
Date: 2010-02-09
New Economics Papers: this item is included in nep-fdg, nep-int and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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