Export and unemployment : an analysis with reference to Malaysia

Syed Abdullah, Engku Zakir Hussein (2006). Export and unemployment : an analysis with reference to Malaysia Master's Thesis, School of Economics, The University of Queensland.

       
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Author Syed Abdullah, Engku Zakir Hussein
Thesis Title Export and unemployment : an analysis with reference to Malaysia
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2006
Thesis type Master's Thesis
Total pages 51
Language eng
Subjects 1402 Applied Economics
Formatted abstract Exports and economic growth are among the most extensively researched materials among academicians and policymakers. This deep interest extends to the analysis of gain from promoting export business. Most investigations and theories merely make implicit assumption that export oriented industry make beneficial contribution to economic growth and national well-being. These theories and debates are discussed concisely in the paper trying to highlight mechanism of gains that export business makes available. If export sector does have an impact on many economic aspects of a nation including labour market, it should have a positive influence on unemployment. Numerous studies were found that look into export issues but there seems to be none which makes an empirical analysis of impact on labour market. This paper makes a daring attempt looking at the link between export and unemployment rate.

A vigorous unit root test is employed on export and unemployment data to prepare a robust regression analysis. Although time series data usually contain unit root characteristic, data on Malaysian export and unemployment rate used in the empirical application do not show the same feature. A simple regression is constructed and several econometric problems are corrected to produce more reliable result. Instead of supporting the popular belief in many economic literatures and real world evidence such as those of eastern tiger economies with various advantages in promoting export activity in an economy, the finding in this paper suggest •otherwise for Malaysia. The empirical evidence provide no support that export activity provide positive effect on unemployment rate, at least during the 1986-2004 period of the data. Instead, the regression suggests that it is the other way around.

This finding is important in that export oriented incentives may not be the best government policy strategies in creating job opportunities among the locals. Malaysia may instead use the limited resource on other more important measures that directly improve national economy but the conclusion is tentative. The discovery is afraid only applies to special cases like Malaysia which depends so much on foreign workers. Further aspects of export needs to be explored before any firm judgement can be given for an economy.

Keyword Unemployment -- Malaysia
Exports -- Malaysia

 
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