Impact of external and domestic shocks on Malaysia's electronic and electrical (E & E) export demand

Norashida Othman, Mohd Azlan Shah Zaidi, Zulkefly Abdul Karim, Zulkornain Yusop

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

This paper analyses the impact of foreign shocks as well as domestic shocks on Malaysia's total E & E export demand. The foreign factors consist of world oil prices index, income and the policy rate for three main trading partner countries of Malaysia namely United States, Japan and Singapore. The domestic factors consist of national income, inflation, interest rates and the real effective exchange rate. The study utilizes monthly data spanning from January 2000 until December 2013. Using the Structural Vector Autoregressive (SVAR) model with non-recursive identification structure, the results indicate that foreign factors are important and dominant variables in explaining the variability of the aggregate exports of E & E in medium term horizon. Impulse Response Function (IRF) and Variance Decomposition (VDC) show that the contribution of the foreign shocks dominates, accounting for around 40% to 50% of the forecast error variance at one year onwards. The results also indicate that Singapore is an important foreign factor compared to US and Japan.

Original languageEnglish
Pages (from-to)1-20
Number of pages20
JournalInternational Journal of Economics and Management
Volume9
Issue numberSpecialIssue
Publication statusPublished - 2015

Fingerprint

Export demand
Malaysia
Factors
Japan
Singapore
Variance decomposition
Income
Forecast error variance
Real effective exchange rate
National income
Interest rates
Inflation
Price index
Oil prices
Vector autoregressive model
Impulse response function

Keywords

  • Domestic shocks
  • E & E export demand
  • Foreign shocks
  • SVAR

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Business and International Management
  • Strategy and Management

Cite this

Impact of external and domestic shocks on Malaysia's electronic and electrical (E & E) export demand. / Othman, Norashida; Zaidi, Mohd Azlan Shah; Abdul Karim, Zulkefly; Yusop, Zulkornain.

In: International Journal of Economics and Management, Vol. 9, No. SpecialIssue, 2015, p. 1-20.

Research output: Contribution to journalArticle

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