Mahendhiran Nair

A cointegration analysis of Malaysian import demand function: reassessment from the bounds test

This paper presents an empirical analysis of the aggregated import demand behaviour for Malaysia. The study involved a small sample of annual data from 1970 to 1998. To estimate the long-term relationship between import demand, and its determinants, namely income and relative prices, a robust estimation method known as the Unrestricted Error Correction Model - Bounds Test Analysis was used. The results show that import volume, income and relative prices are cointegrated. The estimated long-run elasticites of import demand with respect to income and relative prices are 1.5 and -1.3 respectively. This implies that monetary, fiscal and exchange rate policies can be used as instruments to maintain favourable trade balance.

The effects of customer service management on business performance in Malaysian banking industry: an empirical analysis

Purpose – The aim of this paper is to examine the degree of how customer service management (CSM) affects perceived business performance measures (PBPM) in Malaysian banks and finance companies.Design/methodology/approach – The aim was achieved through an empirical study involving a survey. Of 700 questionnaires sent out, 128 were returned. The dataset from the sample underwent series of statistical analyses, i.e. reliability test, factor analyses (exploratory and confirmatory) and structural equation modelling (SEM).Findings – Factor analyses extracted two dimensions, i.e. CSM and perceived business performance. All related indicators manifested their constructs respectively. Although there were expectations where CSM would diverged into more dimensions via exploratory factor analysis (i.e. market research, customer assessment, customer satisfaction and customer relationship management), the results show that CSM were encapsulated as a single construct by respondents. The findings confirmed that CSM had ...

Factors affecting money laundering: lesson for developing countries

Purpose – The primary objective of this paper is to examine the factors that underpin the pervasiveness of money laundering. An empirical method was used to study the relationship between technology (information and communication technology infrastructure), quality of human capital, efficiency of the legal framework, ethical behavior of firms (corporate governance) and capacity for innovation on the pervasiveness of money laundering in developed and developing countries. Based on the empirical findings, key strategies and policies to reduce the pervasiveness of money laundering were examined in this paper.Design/methodology/approach – The sample period for this study was 2004‐2005 entailing 88 developed and developing countries. The ordinary least square method was used in this paper to examine the impact of the above‐mentioned factors on the pervasiveness of money laundering.Findings – The empirical analysis showed that efficient legal framework with good corporate governance lower the pervasiveness of m...

Innovation, financial development and economic growth in Eurozone countries

ABSTRACT Using a panel vector auto-regressive model, we study interactions between innovation, financial development and economic growth in 18 Eurozone countries between 1961 and 2013. We focus on whether causality runs between these variables both ways, one way, the other way or not at all. Our empirical results show that development of the financial sector and enhanced innovative capacity in the Eurozone contributes to long-term economic growth in the countries in the region.

Money laundering in Malaysia

Highlights the growth of money laundering in Malaysia and the efforts of the Malaysian government to curb it, including the Anti‐Money Laundering Act 2001; Malaysia was named by the US Pentagon as one of the countries through which terrorist funds pass to become legitimate, and the country includes the Labuan International Offshore Financial Center, which is likely to be a target for money laundering. Outlines the Act’s provisions and the involvement of Malaysia in the Asia Pacific Group of Money Laundering since May 2000. Suggests improvements in the system: improved international cooperation, proper mechanisms for handling suspicious reports, implementing a compliance culture among financial institutions, strict application of bank‐licensing procedures, plus training and new technology investment.

A creative learning ecosystem, quality of education and innovative capacity: a perspective from higher education

Globally, governments recognize the importance of creativity and innovation for sustainable socioeconomic development, and many invest resources to develop learning environments that foster these capacities. This paper provides a systematic framework based on Nairs Innovation Helix model for studying the factors of a countrys creative learning ecosystem (CLE), the quality of its education system (QES), and its innovative capacity (IC). The CLE factors are infrastructure/infostructure (physical and digital infrastructure), intellectual capital, interaction, integrity systems, incentives, and institutions. Using a composite CLE index for 113 countries, the findings indicate a strong correlation between a countrys CLE, QES and IC. Through brief case studies of countries that measure highly in CLE, QES and IC, this study points out their higher education strategies and their best practices for other countries to emulate, in order to facilitate creativity and innovation through higher education.

TRENDS OF CONVERGENCE AND DIVERGENCE IN THE INFORMATION ECONOMY: LESSONS FOR DEVELOPING COUNTRIES

Over the last decade, uneven developments and growth in information, communication and technology (ICT) infrastructure, human capital and innovation in the developed and developing countries have led to uneven competitive position across these economies. In this paper, we examine the trends pertaining to the above‐mentioned indicators for selected developed and developing countries. Results from the empirical analysis showed countries that have invested heavily into ICT infrastructure, human capital and innovation tend to have higher productivity levels. The empirical evidence also showed that the gap between the developed and developing countries have increased over the seven years from 1995 to 2001. This study also examined the type of policies pertaining to the above‐mentioned factors in the more developed and highly competitive economies. Results from this empirical analysis will serve as lessons for developing countries to catch‐up with the more evolved economies.

Facebook and socio-economic benefits in the developing world

Facebook is becoming increasingly important for the socio-economic development of countries across the globe as stakeholders engage in online social interaction and expand their reach for new products, services and markets to open up new revenue streams. Past studies have examined the environment that supports effective use of social networking technologies in the developed world. This study argues that the enabling environment in developed and developing countries may vary and therefore may impact Facebook adoption and its socio-economic benefits differently. The model integrates the Unified Theory of Acceptance and Use of Technology (UTAUT) and revised UTAUT. Using a structured questionnaire on a sample of 367 Facebook users, the results show that performance expectancy, effort expectancy, social influence and facilitating conditions (affordability and regulatory environment) are important factors that impact Facebook adoption in a developing country such as Malaysia. The study contributes to the literature by identifying that Facebook users perceived socio-economic benefits act as a mediator between adoption and actual use behaviour (information seeking, socialisation, entertainment and business development). The findings also indicate that religion, ethnicity, language, gender and education are significant factors moderating the adoption-perception-use behaviour of Facebook. Theoretical and practical implications of the study are discussed in the paper.

Malaysian Money Demand Function Revisited: The ARDL Approach

ABSTRACT This article examines the long-run and short-run behavior of the demand for money (M1, M2, and M3) in Malaysia. In this study we used a robust estimation known as the unrestricted error correction model (UECM) and the Bounds test (Pesaran, Shin, & Smith, 2001) to determine if the demand for money is cointegrated with real income, interest rate, and the price level. Prior to the cointegration analysis, we tested whether the demand for money series had undergone any structural breaks due to the 1997 Asian financial crisis using the Gregory–Hansen structural break approach. The study used annual data from 1970 to 2004. The Gregory–Hansen test suggests that the 1997 Asian financial crisis did not have a significant impact on the cointegration relationship between money demand and its determinants. The Bounds test revealed that the demand for M1, M2, and M3 are cointegrated with its determinants at the 1% level of significance. Thus, the long-run demand for money was found to be stable. This implies that monetary targeting may be a useful for the conduct of the monetary policy.

Trade openness, foreign direct investment, and finance-growth nexus in the Eurozone countries

ABSTRACT The paper investigates causal relationships between trade openness, foreign direct investment, financial development, and economic growth in 19 Eurozone countries over the period 1988–2013. Using a panel vector error-correction model (VECM), the empirical results show that these variables are cointegrated. The study shows that a combination of opening the Eurozone countries for trade and fostering their financial and economic development have elevated inflows of foreign direct investment into the region in the long run. At the same time, increasing inflows of foreign direct investment in the short run have propelled economic growth, which in return has strengthened the role of financial development and international trade to sustain economic growth in the region through feedback effects. The empirical results have important policy implications for countries in the Eurozone, especially those who face challenges as a result of lack of confidence in their financial system and those who face a sovereign debt crisis.