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The Impact of Economy Affirmative to Wealth Distribution Among Ethnic Groups in Malaysia

In: Corporate Management Ecosystem in Emerging Economies

Author

Listed:
  • Muhammad Najit Sukemi

    (Universiti Malaysia Terengganu)

  • Mohd Nasir Nawawi

    (Universiti Malaysia Terengganu)

  • Nizam Ahmat

    (Universiti Malaysia Terengganu)

  • Jumadil Saputra

    (Universiti Malaysia Terengganu)

  • Shamsul Amri Baharuddin

    (Institut Kajian Etnik, Universiti Kebangsaan Malaysia)

Abstract

Affirmative action is a conflict resolution mechanism for ethnic tensions and socio-economic imbalances. In Malaysia, affirmative action was implemented through a New Economic Policy (NEP) in 1970 to address economic imbalances and wealth inequality among ethnics through the distribution of the equity with the goal of 30% Bumiputera’s-owned and 40% non-Bumiputera owned. After 40 years of implementation, the goal of equity distribution is yet to be achieved. However, does the implementation of affirmative action affect the distribution of wealth for each ethnic group? Thus, this study aims to evaluate the influence of economics affirmative policies to the distribution of wealth between ethnic groups in Malaysia. This study used equity data for 42 years for ethnicity holdings and tested it by using the autoregressive distributed lag (ARDL) approach. The findings show that the implementation of affirmative action has significant influence in affecting the distribution of wealth between ethnic groups in both the short term and the long term. The study also proves that the wealth distribution between ethnic groups was distributed through growing economy rather than through the acquisition of other ethnic ownership, especially Chinese ethnic ownership, which was later transferred to Bumiputera.

Suggested Citation

  • Muhammad Najit Sukemi & Mohd Nasir Nawawi & Nizam Ahmat & Jumadil Saputra & Shamsul Amri Baharuddin, 2023. "The Impact of Economy Affirmative to Wealth Distribution Among Ethnic Groups in Malaysia," Springer Books, in: Fred A. Yamoah & Adnan ul Haque (ed.), Corporate Management Ecosystem in Emerging Economies, pages 425-446, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-41578-4_22
    DOI: 10.1007/978-3-031-41578-4_22
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