The impact of government sectoral expenditure on malaysia s economic growth
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Malaysia. The Impact Of Government Sectoral Expenditure On Malaysia’s Economic Growth. Presenter : AIMI AJLAA BINTI SALIMI. CONTENTS. INTRODUCTION. Malaysia’s Overview:

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The Impact Of Government Sectoral Expenditure On Malaysia’s Economic Growth

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The impact of government sectoral expenditure on malaysia s economic growth

Malaysia

The Impact Of Government Sectoral Expenditure On Malaysia’s Economic Growth

Presenter : AIMI AJLAA BINTI SALIMI


Contents

CONTENTS


Introduction

INTRODUCTION

Malaysia’s Overview:

  • After independence in 1957, economic growth of Malaysia was increased due to the increased on government expenditure on health, education, communication and other public sectors.

  • During the financial crisis in 1997 until 1999, the current account is deficit over 6% of gross domestic product (GDP). In 2008, the crisis again occurred which impact to the Malaysian economy performed decrease on GDP growth rate of 4.6%.

  • In 2009 until 2012, economy of Malaysia has been recovered and expected to record positive growth rate.


Introduction1

INTRODUCTION

Background of the study:

  • The Malaysia’s economy have impact on two types of government expenditure which includes government development expenditure and government operating expenditure.

  • From these two types of government expenditure has performed the total government expenditure.

  • The government expenditure includes security, social services, economic services and general administration. These study focuses on economic services : health and education expenditure that will impact to economic growth


Introduction2

INTRODUCTION


Introduction3

INTRODUCTION


Literature review

LITERATURE REVIEW


Literature review1

LITERATURE REVIEW


Methodology

METHODOLOGY


Methodology1

METHODOLOGY

  • Steps on gathering the results:1) Stationarity Test (Unit Root Test) by using Augmented Dickey-Fuller (ADF) test and Philips Perron (PP) test

    2) Autoregressive Distributed Lags (ARDL) test:

    a) F-statistic testb) Long Run Cointegration

    c) Short Run Cointegration

    3) Diagnostic Test:

    a) Jarque-Bera Normality test

    b) Lagrange Multiplier (LM) serial correlation test

    c) Autoregressive Conditional Heteroscedasticity (ARCH) test

    d) Ramsey RESET functional form tests (Error test)

    e) CUSUM and CUSUM-squared test


Result and discussion

RESULT AND DISCUSSION

To test the unit root most widely used test is Augmented Dickey-Fuller (ADF) test and Philips-Perron (PP)

S

T

A

T

I

O

N

A

R

I

T

Y


Adf test and pp test

ADF test and PP test

Notes: Significant Level: *** 1% ; **5% ; *10%


Result and discussion1

RESULT AND DISCUSSION

  • ARDL cointegration test:

    To perform ARDL cointegration test, the model should be transformed into unrestricted error correction model (UECM)

Autoregressive Distributed Lags (ARDL) test

A

R

D

L

APPROACH

Cointegration test


Result and discussion2

RESULT AND DISCUSSION

F-test4.5442F-test > Critical Values

H0 : 1 = 2 = 3 = 4 = 5 = 0 (no cointegration)

H1 : 1 ≠ 2 ≠ 3 ≠ 4 ≠ 5 ≠ 0 (cointegration)

A

Reject the H0

R

D

Critical Values for ARDL Cointegration Test, Narayan (2005)

L

Critical Values ( k = 4 , n = 40)

APPROACH

10% Significant level


Result and discussion3

RESULT AND DISCUSSION

Long Run Cointegration

A

R

D

L

APPROACH

Notes: Significant Level: *** 1% ; **5% ; *10%


Result and discussion4

RESULT AND DISCUSSION

Short Run Cointegration

A

R

D

L

APPROACH

Notes: Significant Level: *** 1% ; **5% ; *10%


Result and discussion5

DIAGNOSTIC TESTS

RESULT AND DISCUSSION


Result and discussion6

RESULT AND DISCUSSION

*CUSUM and CUSUM-squared in order to test for constancy of long-run parametersBrown et al. (1975) *Result:Both stay within the critical bounds as the estimated parameters are stable over the analysis period


Conclusion

CONCLUSION


The impact of government sectoral expenditure on malaysia s economic growth

THANK YOU

Malaysia

q&a

Presenter : AIMI AJLAA BINTI SALIMI


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