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

Malaysia

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

Presenter : AIMI AJLAA BINTI SALIMI

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
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 test b) 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 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

slide20

THANK YOU

Malaysia

q&a

Presenter : AIMI AJLAA BINTI SALIMI

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