The liberalization of financial sector development towards economic growth in Malaysia
This stu dy aims to examine the relationship between financial sector development, real effective exchange rate, trade openness (sum of import and export), foreign direct investment (FDI) and economic growth in Malaysia from 1976 to 2005. F ive types of methods...
| Main Author: | |
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| Format: | Final Year Project Report / IMRAD |
| Language: | English |
| Published: |
Universiti Malaysia Sarawak, UNIMAS
2009
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/6484/ http://ir.unimas.my/id/eprint/6484/8/THE%20LIBERALIZATION%20OF%20FINANCIAL%20SECTOR%20DEVELOPMENT%20TOWARDS%20ECONOMIC%20GROWTH%20IN%20MALAYSIA%28OCR%29.pdf |
| Summary: | This stu
dy aims
to examine the relationship between financial sector development,
real
effective exchange rate, trade openness (sum of import and export), foreign direct
investment (FDI) and economic growth
in Malaysia
from
1976
to
2005.
F
ive types of
methods
incl
ude
Augmented Dickey
-
Fuller (ADF)
U
nit
R
oot
T
est
,
Johansen and
Juselius
C
ointegration
T
est
,
Normalized Equation,
Granger
-
Causality Test,
and
Cumulative Sum of Recursive Residuals (CUSUM) Stability Test
are conducted in this
study
.
The results show that fin
ancial sector development and trade
openness were
greatly improving economic growth. However, the real effective exchange rate and
f
oreign direct investment (FDI)
were negatively affecting
growth of Malaysia’s
economy
.
Overall
,
the
empirical
results suppor
t that
well
-
developed financial sector
plays significant role in leading domestic economy expansion. In addition, economic
growth
was found to
Granger
-
cause financial
development
in the short run
. |
|---|