A Macro Assessment of China Effects on Malaysian Exports and Trade Balances

Tze-Haw Chan (), Hooi Hooi Lean () and Chee-Wooi Hooy

MPRA Paper from University Library of Munich, Germany

Abstract: This paper focuses on the impact of China’s export expansion on Malaysian monthly trading with to her 12 major trading partners over the liberalization era. Structural break(s) found mostly coincides with the Asia financial crisis and China’s accession into WTO and, regime shifts are evident in the long run relationship among the variables being studied. While the income effects are more apparent, real exchanges are rather insignificant and incorrectly signed for Malaysian bilateral trading. An attempt to correct current account imbalances by currency devaluation would thereby inappropriate. In addition, estimation of the trade balance models is more superior that complementary China effects are better captured for Malaysia trading with the advanced markets such as Australia, German, Japan, UK and the US. Such finding may partly due to the increase in global product fragmentation

Keywords: Malaysian trading; China effect; cointegration; VAR; structural break (search for similar items in EconPapers)
JEL-codes: C51 F41 (search for similar items in EconPapers)
Date: 2013-04-01, Revised 2013-08-01
New Economics Papers: this item is included in nep-sea
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: A macro assessment of China effects on Malaysian exports and trade balances (2014)
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