IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/114290.html
   My bibliography  Save this paper

The lead-lag relationship between industrial production and international trade: Malaysian evidence

Author

Listed:
  • Ahmad, Syafiq
  • Masih, Mansur

Abstract

This paper seeks to investigate the lead-lag relationship between industrial production and international trade. The standard time series techniques are applied and Malaysia is used as a case study. We have reviewed a number of studies that analyze some other open East Asian countries such as, South Korea and Taiwan and we noticed that the relationship between these two variables in those countries is unidirectional from trade to industrial production, in the sense that trade openness tends to enhance industrial production through technological transfer. In the case of Malaysia as well, the key empirical finding of this study is that international trade is leading the industrial production like many other East Asian open economies. The results are intuitive and plausible and contain strong policy implications

Suggested Citation

  • Ahmad, Syafiq & Masih, Mansur, 2018. "The lead-lag relationship between industrial production and international trade: Malaysian evidence," MPRA Paper 114290, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:114290
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/114290/1/MPRA_paper_114290.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    2. Ehsan U. Choudhri & Dalia S. Hakura, 2000. "International Trade and Productivity Growth: Exploring the Sectoral Effects for Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 1-2.
    3. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    4. Mansur Masih & Ali Al-Elg & Haider Madani, 2009. "Causality between financial development and economic growth: an application of vector error correction and variance decomposition methods to Saudi Arabia," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1691-1699.
    5. Thompson, Henry, 1999. "Production and the Trade Balance in a Small Open Economy," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 14, pages 432-441.
    6. Caves, Richard E, 1980. "International Trade and Industrial Organization: Introduction," Journal of Industrial Economics, Wiley Blackwell, vol. 29(2), pages 113-117, 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. Roberto Cellini & Tiziana Cuccia, 2013. "Museum and monument attendance and tourism flow: a time series analysis approach," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3473-3482, August.
    2. Abu Bakar, Norhidayah & Masih, Mansur, 2016. "Is islamic stock related to interest rate ? Malaysian evidence," MPRA Paper 101190, University Library of Munich, Germany.
    3. Zakaria, Khairuddin & Masih, Mansur, 2017. "Impact of various islamic equity markets on sharia (islamic) compliant equity invesments in emerging markets," MPRA Paper 103799, University Library of Munich, Germany.
    4. Helmi Hamdi & Rashid Sbia & Bedri Kamil Onur Tas, 2014. "Financial Deepening and Economic Growth in Gulf Cooperation Council Countries," International Economic Journal, Taylor & Francis Journals, vol. 28(3), pages 459-473, September.
    5. Shin, Claire & Masih, Mansur, 2016. "Lead-lag relationship between macroeconomic variables: evidence from Korea," MPRA Paper 107870, University Library of Munich, Germany.
    6. Daqane, Mohamed Qalib & Masih, Mansur, 2016. "Is islamic stock market affected by interest rates ? Malaysia as a case study," MPRA Paper 103784, University Library of Munich, Germany.
    7. Ikram, Ahmad & Masih, Mansur, 2018. "Does international trade lead industrial production or the other way around ? evidence from Malaysia," MPRA Paper 111210, University Library of Munich, Germany.
    8. Polemis, Michael L. & Dagoumas, Athanasios S., 2013. "The electricity consumption and economic growth nexus: Evidence from Greece," Energy Policy, Elsevier, vol. 62(C), pages 798-808.
    9. Kalthum, Ummi & Masih, Mansur, 2017. "The lead-lag relationship between PPI, CPI and oil price: Malaysian evidence," MPRA Paper 108011, University Library of Munich, Germany.
    10. Osman, Fatimah & Masih, Mansur, 2017. "What are the drivers of islamic bank deposits ? evidence from Malaysia," MPRA Paper 103721, University Library of Munich, Germany.
    11. Levent, Korap, 2007. "Modeling purchasing power parity using co-integration: evidence from Turkey," MPRA Paper 19584, University Library of Munich, Germany.
    12. Zamani, Mehrzad, 2007. "Energy consumption and economic activities in Iran," Energy Economics, Elsevier, vol. 29(6), pages 1135-1140, November.
    13. Muhammad Zia Ullah Khan & Muhammad Illyas & Muqqadas Rahman & Chaudhary Abdul Rahman, 2015. "Money Monetization and Economic Growth in Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(4), pages 184-192, April.
    14. Muhammad Shafiullah & Ravinthirakumaran Navaratnam, 2016. "Do Bangladesh and Sri Lanka Enjoy Export-Led Growth? A Comparison of Two Small South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 114-132, March.
    15. Saaed, A.A.J., 2007. "Inflation and Economic Growth in Kuwait: 1985-2005. Evidence from Co-Integration and Error Correction Model," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(1).
    16. Titus O. Awokuse, 2003. "Is the export-led growth hypothesis valid for Canada?," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 126-136, February.
    17. Yap, Wei Yim & Lam, Jasmine S.L., 2006. "Competition dynamics between container ports in East Asia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 35-51, January.
    18. R. Santos Alimi, 2014. "ARDL Bounds Testing Approach to Cointegration: A Re-Examination of Augmented Fisher Hypothesis in an Open Economy," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 2(2), pages 103-114, June.
    19. Ely, David & Salehizadeh, Mehdi, 2001. "American depositary receipts: An analysis of international stock price movements," International Review of Financial Analysis, Elsevier, vol. 10(4), pages 343-363.
    20. Claire G.Gilmore & Brian Lucey & Ginette M.McManus, 2005. "The Dynamics of Central European Equity Market Integration," The Institute for International Integration Studies Discussion Paper Series iiisdp069, IIIS.

    More about this item

    Keywords

    industrial production; trade balance; productivity; economic growth; Malaysia;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    Statistics

    Access and download statistics

    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:pra:mprapa:114290. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.