The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan

This paper examines the short- and long-run relationships between trade balance,real exchange rates, income and money supply in the case of Malaysia. Data for the variables were obtained from World Development Indicators (WDI) from 1975 to 2010 The results based on the Johansen Juselius there is atl...

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Main Authors:	Azrin, Khairunnisa, Azizan, Mohammad Amyrul Hafiz
Format:	Student Project
Language:	English
Published:	Faculty of Business and Management 2013
Subjects:	Economics International economic relations International trade
Online Access:	http://ir.uitm.edu.my/id/eprint/25097/ http://ir.uitm.edu.my/id/eprint/25097/1/PPb_KHAIRUNNISA%20AZRIN%20M%20BM%2013_5.pdf

id	uitm-25097
recordtype	eprints
spelling	uitm-250972019-09-25T02:04:42Z http://ir.uitm.edu.my/id/eprint/25097/ The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan Azrin, Khairunnisa Azizan, Mohammad Amyrul Hafiz Economics International economic relations International trade This paper examines the short- and long-run relationships between trade balance,real exchange rates, income and money supply in the case of Malaysia. Data for the variables were obtained from World Development Indicators (WDI) from 1975 to 2010 The results based on the Johansen Juselius there is atleast two cointergration vector equation in the study using lag 1. Based on Johansen Juselius we found equilibrium relationship exists between trade balance and the determinants of trade. Based on Juselius there is two long run relationships appear in the model. It was from hypothesis none and atmost 1 where the figure of trace statistic is bigger than 5 % critical value. We also are using VECM test and Granger Causality test to examine the long run relationships and short run relationship in the model. We found that there is a directional relationship between GDP and REER because the probability is less than 0.05. There is also shows that there is only one short run relationship that appears in the model. Results shows that trade balance and real exchange effective rates have long run relationship because of negatives value result on VECM test. The result was supported by previous study by (2007) . A few policies implication can be recommended such as government should increase trade deficit of raw materials. Another than that, government also should increase export penetration to other country.Than there is two other recommendation on increasing food production to increase trade balance. Faculty of Business and Management 2013 Student Project NonPeerReviewed text en http://ir.uitm.edu.my/id/eprint/25097/1/PPb_KHAIRUNNISA%20AZRIN%20M%20BM%2013_5.pdf Azrin, Khairunnisa and Azizan, Mohammad Amyrul Hafiz (2013) The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan. [Student Project] (Unpublished)
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
language	English
topic	Economics International economic relations International trade
spellingShingle	Economics International economic relations International trade Azrin, Khairunnisa Azizan, Mohammad Amyrul Hafiz The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan
description	This paper examines the short- and long-run relationships between trade balance,real exchange rates, income and money supply in the case of Malaysia. Data for the variables were obtained from World Development Indicators (WDI) from 1975 to 2010 The results based on the Johansen Juselius there is atleast two cointergration vector equation in the study using lag 1. Based on Johansen Juselius we found equilibrium relationship exists between trade balance and the determinants of trade. Based on Juselius there is two long run relationships appear in the model. It was from hypothesis none and atmost 1 where the figure of trace statistic is bigger than 5 % critical value. We also are using VECM test and Granger Causality test to examine the long run relationships and short run relationship in the model. We found that there is a directional relationship between GDP and REER because the probability is less than 0.05. There is also shows that there is only one short run relationship that appears in the model. Results shows that trade balance and real exchange effective rates have long run relationship because of negatives value result on VECM test. The result was supported by previous study by (2007) . A few policies implication can be recommended such as government should increase trade deficit of raw materials. Another than that, government also should increase export penetration to other country.Than there is two other recommendation on increasing food production to increase trade balance.
format	Student Project
author	Azrin, Khairunnisa Azizan, Mohammad Amyrul Hafiz
author_facet	Azrin, Khairunnisa Azizan, Mohammad Amyrul Hafiz
author_sort	Azrin, Khairunnisa
title	The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan
title_short	The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan
title_full	The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan
title_fullStr	The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan
title_full_unstemmed	The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan
title_sort	determinants of malaysian trade balance: a johansen and juselius approach / khairunnisa azrin and mohammad amyrul hafiz azizan
publisher	Faculty of Business and Management
publishDate	2013
url	http://ir.uitm.edu.my/id/eprint/25097/ http://ir.uitm.edu.my/id/eprint/25097/1/PPb_KHAIRUNNISA%20AZRIN%20M%20BM%2013_5.pdf
first_indexed	2023-09-18T23:14:02Z
last_indexed	2023-09-18T23:14:02Z
_version_	1777418992651075584

The determinants of Malaysian trade balance: a Johansen and Juselius approach / Khairunnisa Azrin and Mohammad Amyrul Hafiz Azizan

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