Mohd Yusof Saari

Financial development and sectoral CO2 emissions in Malaysia

The paper examines the impacts of financial development on sectoral carbon emissions (CO2) for environmental quality in Malaysia. Since the financial sector is considered as one of the sectors that will contribute to Malaysian economy to become a developed country by 2020, we utilize a cointegration method to investigate how financial development affects sectoral CO2 emissions. The long-run results reveal that financial development increases CO2 emissions from the transportation and oil and gas sector and reduces CO2 emissions from manufacturing and construction sectors. However, the elasticity of financial development is not significant in explaining CO2 emissions from the agricultural sector. The results for short-run elasticities were also consistent with the long-run results. We conclude that generally, financial development increases CO2 emissions and reduces environmental quality in Malaysia.

Virtual water trade in industrial products: evidence from Malaysia

Virtual water embodied in international trade is equivalent to nearly one-third of global water withdrawal, confirming that trade plays a significant role in redistributing global water resources. This paper extends a virtual water analysis by measuring the extent to which virtual water embodied in traded industrial products affects the distribution of global virtual water. The distribution of global virtual water can be improved if trade in industrial products promotes virtual water outflows from water-abundant to water-scarce countries. Analyses were performed using an input–output model that can decompose water consumption into domestic demand and exports by destinations of trade. Focusing on Malaysia, the results indicate that trade in industrial products between Malaysia and its main trading partners have a limited capacity to improve the distribution of global virtual water. This limitation can be due to two reasons. Firstly, exports of Malaysian industrial products are mainly driven by less water-intensive sectors. Therefore, the amount of virtual water that outflows into other countries is also low. Secondly, trade in Malaysian industrial products largely involves water flows with other water-abundant countries. Only several water-scarce countries benefit from virtual water trade in industrial products with Malaysia, namely the Netherlands, Australia and China.

Small and Medium Food Enterprises in Malaysia: Institutional Support and Policy Perspectives

In Malaysia, SMEs constitute 99.2 per cent of the manufacturing establishments while the food SMEs or SMFES account for only about 1 per cent of the total. The SMEs are engine of growth, growing at a rate higher than the country’s average growth rate. However, the SMFEs sector has not progressed in tandem with the increase in demand for food due to rise in population and income. Malaysia has instituted a number of policy innovations to steer its SME development through the National SME Development Council (NSDC), which mobilizes 15 ministries and 60 agencies to support this sector on all aspects—finance, infrastructure, entrepreneurial training, legal support and so on. This article provides a review of the SMFEs in Malaysia and examines the institutional support available for this sector. The article concludes that despite the support provided, the SMFEs are plagued with structural problems that require more than institutional support and that include R&D and innovation, infrastructural development and specific policies to address their unique problems.

The nexus between energy price changes and environmental quality in Malaysia

ABSTRACT This paper provides new evidence by examining the impact of oil price changes on environmental quality. Having utilized three co-integrating estimators and a dataset from 1983 to 2014, we found that lower oil price can increase carbon emissions and reduce environmental quality. On the other hand, higher oil price can mitigate carbon emissions and improve environmental quality. We recommend the use of cleaner energy sources to improve environmental quality during lower oil price.

Measuring the economic impacts of recent oil price shocks on oil-dependent economy: evidence from Malaysia

ABSTRACT This paper examines the economy-wide impacts of recent oil price shocks on the Malaysian economy. To achieve this objective, an integrated methodological framework that combines econometric and input–output models is utilized to assess the impacts of an oil price shock on tax revenues, employment, labor income and gross domestic product (GDP). Our results reveal that the recent oil price shocks significantly affects these macroeconomic variables. The decline in oil prices from 2015 to 2016 reduces tax revenues by 10.5%, lower GDP by 1.9% and increases the unemployment rate by 0.3%. As such, the sharp crunch in oil prices serves as a reminder to policymakers on the vulnerability inherent in overreliance on oil exports and the urgent need to diversify the economy.

Does Trade in Industrial Products have the Potential to Improve Distribution of Global Virtual Water

Virtual water refers to the amount of water used in the production of a product (a commodity, goods or services). This study examines the extent to which trade in industrial products (i.e. mining and manufacturing) between Malaysia and other countries will affect the distribution of water in water-abundant and water-scarce countries. Analyses of virtual water for 67 industrial sectors are conducted using the input–output model. This model has the ability to decompose virtual water content in the domestic demand and exports as well as virtual water import. This model also distinguishes virtual water flows (export and import) by trade destinations. Results show that resource based products are water intensive whereas electronics and electrical, machinery and equipment, and transport equipment are water non-intensive. Exports explain more than two-thirds of water consumption. Malaysia exports water non-intensive products and import water intensive products. The potential role of trade in industrial products as a policy instrument for global water distribution is limited. First, since the production of industrial products is essentially water non-intensive, thus exports of these products are not associated with large amount of water outflows. Second, trade in industrial products involves water flows among the water-abundant countries but not in water scarce countries.