IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v9y2021i3p106-d599666.html
   My bibliography  Save this article

A Probe into the Status of the Oil Palm Sector in the Malaysian Value Chain

Author

Listed:
  • Fathin Faizah Said

    (Center for Sustainable and Inclusive Development Studies, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Selangor, Malaysia)

  • Sharifah Nur Ainn Syed Roslan

    (Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Selangor, Malaysia)

  • Mohd Azlan Shah Zaidi

    (Center for Sustainable and Inclusive Development Studies, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Selangor, Malaysia)

  • Mohd Ridzwan Yaakub

    (Center for Artificial Intelligence and Technology, Faculty of Information Science and Technology, Universiti Kebangsaan Malaysia, Bangi 43600, Selangor, Malaysia)

Abstract

A ban on palm oil imports by the European Union has become a problematic issue, especially for palm oil producers’ countries. Oil palm has been widely used in many sub-sectors, and any changes in the production side may affect many sectors that use oil palm as an input factor in their productions. This study explores the chain of the oil palm sector on the other sub-sectors in Malaysia by using a value-added multiplier method and network modeling. The study focuses on the specific oil palm sub-sector and oils and fats sub-sector in the Malaysian economic structure based on the Malaysian Input-Output 2015 Table. Network visualization and all the analyses involving network methods were developed and performed using UCINET and GEPHI software. The value-added multiplier results explained that the net value between output multiplier and import multiplier is vital to depict the real impact of net resources used as an input factor in the oils and fats and oil palm sub-sectors. The high-density value level shows that the Malaysian oil palm sector has high connectivity in the economic system. From the network visualization analysis, the oils and fats sub-sector has a high level of integration with other sectors within the network. Meanwhile, the oil palm sub-sector categorized in the periphery structure group has a low level of integration in the input-output network. This is due to the high value-added demand for oil palm in the oils and fats sub-sector in the manufacturing sector. Overall, most of the sub-sectors in Malaysia are highly interconnected due to the high clustering ratio. Therefore, ensuring sufficient oil palm production is vital for sustainable production of other sub-sectors.

Suggested Citation

  • Fathin Faizah Said & Sharifah Nur Ainn Syed Roslan & Mohd Azlan Shah Zaidi & Mohd Ridzwan Yaakub, 2021. "A Probe into the Status of the Oil Palm Sector in the Malaysian Value Chain," Economies, MDPI, vol. 9(3), pages 1-24, July.
    • Handle: RePEc:gam:jecomi:v:9:y:2021:i:3:p:106-:d:599666
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/9/3/106/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/9/3/106/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Raffaele Giammetti & Alberto Russo & Mauro Gallegati, 2020. "Key sectors in input–output production networks: An application to Brexit," The World Economy, Wiley Blackwell, vol. 43(4), pages 840-870, April.
    2. Richard Baldwin & Javier Lopez-Gonzalez, 2015. "Supply-chain Trade: A Portrait of Global Patterns and Several Testable Hypotheses," The World Economy, Wiley Blackwell, vol. 38(11), pages 1682-1721, November.
    3. Pammolli, Fabio & Riccaboni, Massimo, 2002. "Technological Regimes and the Growth of Networks: An Empirical Analysis," Small Business Economics, Springer, vol. 19(3), pages 205-215, November.
    4. Fathin Faizah Said, 2017. "Global Banking on the Financial Network Modelling: Sectorial Analysis," Computational Economics, Springer;Society for Computational Economics, vol. 49(2), pages 227-253, February.
    5. Grazzini, Jakob & Spelta, Alessandro, 2022. "An empirical analysis of the global input–output network and its evolution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 594(C).
    6. Federica Cerina & Zhen Zhu & Alessandro Chessa & Massimo Riccaboni, 2015. "World Input-Output Network," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-21, July.
    7. Martha Alatriste-Contreras, 2015. "The relationship between the key sectors in the european union economy and the intra-European Union trade," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 4(1), pages 1-24, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bartesaghi, Paolo & Clemente, Gian Paolo & Grassi, Rosanna & Luu, Duc Thi, 2022. "The multilayer architecture of the global input-output network and its properties," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 304-341.
    2. Lizhi Xing & Qing Ye & Jun Guan, 2016. "Spreading Effect in Industrial Complex Network Based on Revised Structural Holes Theory," PLOS ONE, Public Library of Science, vol. 11(5), pages 1-18, May.
    3. Xing, Lizhi & Dong, Xianlei & Guan, Jun, 2017. "Global industrial impact coefficient based on random walk process and inter-country input–output table," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 471(C), pages 576-591.
    4. Stefano Costa & Federico Sallusti & Claudio Vicarelli, 2022. "Trade networks and shock transmission capacity: a new taxonomy of Italian industries," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(1), pages 133-153, March.
    5. Zhu, Zhen & Morrison, Greg & Puliga, Michelangelo & Chessa, Alessandro & Riccaboni, Massimo, 2018. "The similarity of global value chains: A network-based measure," Network Science, Cambridge University Press, vol. 6(4), pages 607-632, December.
    6. Flora Bellone & Arnaud Persenda & Paolo Zeppini, 2024. "The Rise of China in the Global Production Network: What Can Autocatalytic Sets Teach Us?," GREDEG Working Papers 2024-26, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    7. Vahid Moosavi & Giulio Isacchini, 2017. "A Markovian model of evolving world input-output network," PLOS ONE, Public Library of Science, vol. 12(10), pages 1-18, October.
    8. Han, Yang, 2022. "The impact of the COVID-19 pandemic on China's economic structure: An input–output approach," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 181-195.
    9. Leonidov, Andrey & Serebryannikova, Ekaterina, 2019. "Dynamical topology of highly aggregated input–output networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 518(C), pages 234-252.
    10. Li, Weidong & Wang, Anjian & Zhong, Weiqiong & Xing, Wanli & Liu, Jinna, 2022. "The role of mineral-related industries in Chinese industrial pattern," Resources Policy, Elsevier, vol. 76(C).
    11. Luca Salvatici & Silvia Nenci, 2017. "New features, forgotten costs and counterfactual gains of the international trading system," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(4), pages 592-633.
    12. Jun Guan & Xiaoyu Xu & Shan Wu & Lizhi Xing, 2018. "Measurement and simulation of the relatively competitive advantages and weaknesses between economies based on bipartite graph theory," PLOS ONE, Public Library of Science, vol. 13(5), pages 1-28, May.
    13. Vahid Moosavi & Giulio Isacchini, 2016. "A Markovian Model of the Evolving World Input-Output Network," Papers 1612.06186, arXiv.org, revised Sep 2017.
    14. Feás, Enrique, 2023. "The impact of the Brexit referendum on UK’s value-added exports: A structural decomposition," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1239-1254.
    15. Federica Cerina & Zhen Zhu & Alessandro Chessa & Massimo Riccaboni, 2015. "World Input-Output Network," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-21, July.
    16. Barauskaite, Kristina & Nguyen, Anh D.M., 2021. "Global intersectoral production network and aggregate fluctuations," Economic Modelling, Elsevier, vol. 102(C).
    17. Saygılı, Hülya, 2017. "Production fragmentation and factor price convergence," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 535-544.
    18. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2020. "Wage response to global production links: evidence for workers from 28 European countries (2005–2014)," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 769-801, November.
    19. Hylke Vandenbussche & William Connell & Wouter Simons, 2022. "Global value chains, trade shocks and jobs: An application to Brexit," The World Economy, Wiley Blackwell, vol. 45(8), pages 2338-2369, August.
    20. Gideon Ndubuisi & Solomon Owusu, 2021. "How important is GVC participation to export upgrading?," The World Economy, Wiley Blackwell, vol. 44(10), pages 2887-2908, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:9:y:2021:i:3:p:106-:d:599666. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.