A note on the nonlinear wages-productivity nexus for Malaysia

Chor Foon Tang

MPRA Paper from University Library of Munich, Germany

Abstract: This study is to empirically investigate the effect of real wages on productivity in Malaysia using monthly data from January 1983 to November 2009. The Johansen’s test suggests that wages and productivity are cointegrated. Moreover, productivity and real wages have a quadratic relationship in the long run (i.e., inverse-U shape curve) instead of linear relationship. Hence, the effect of real wages on productivity is not monotonic. Furthermore, the Granger causality test indicates that real wages and productivity is bilateral causality in nature.

Keywords: Causality; Cointegration; Malaysia; Wages-Productivity (search for similar items in EconPapers)
JEL-codes: C22 J24 J30 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-eff, nep-lab and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://mpra.ub.uni-muenchen.de/27286/1/MPRA_paper_27286.pdf revised version (application/pdf)

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