Santha Vaithilingam

Electronic Banking in Malaysia: A Note on Evolution of Services and Consumer Reactions

Developments in information technology and telecommunications have set in motion an electronic revolution in the Malaysian banking sector This in turn has resulted in new delivery channels for banking products and services such as the automated teller machines (ATM’s), telebanking and PC-banking. In this context the purpose of this study is to examine the evolution of electronic banking in Malaysia, analyze the various electronic delivery channels utilized by local banks and to assess the consumers’ reactions to these delivery channels.

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...

Bank Lending and Economic Growth in Malaysia

ABSTRACT The trends in globalization, the impending liberalization and the recent Asian financial crisis, has brought renewed interest on the importance of bank credit and their impact on economic growth. In this context, this paper analyzes the role of commercial bank lending on economic growth in Malaysia focusing particularly on the issue of causality between commercial bank credit and economic growth. To this extent, the study attempts to answer the following question, “Does economic growth influence the extent of commercial bank lending or does commercial bank lending influence economic growth?” The findings indicate that an increase in commercial bank loans to the private sector has a direct effect on real income.

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.

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.

Managing Money Laundering in a Digital Economy

The emergence of the digital economy has serious implications on the pervasiveness of money laundering. The key factors that affect money laundering activities were studied using the double-Tobit method. In particular, this article addresses the implications of information and communication technology on money laundering behavior. The key findings from the study provide evidence that information and communication technology alone is not effective in curbing money laundering activities but effective when coupled with a high-skilled workforce and an efficient tax system.Based on the findings, various initiatives were identified. Enforcement challenges faced to combat money laundering globally and, in particular, in developing economies were also discussed.

The 2013 Malaysian Elections: Ethnic Politics or Urban Wave?

In this article we examine the electoral impact of urbanization vis-a-vis ethnicity in Malaysia. We employed a robust econometric technique, the fractional response logit model, on data from the recently concluded thirteenth general election. The findings show that there are both an ethnic effect and an urban effect in determining the distribution of parliamentary seats among the political groups. Strong support for the opposition coalition, Pakatan Rakyat, was evident in urban constituencies, while the ruling coalition, Barisan Nasional, continued to enjoy success in rural constituencies. Although Barisan Nasional is still dependent on Bumiputera support, its success is also dependent on non-Bumiputera support from rural constituencies. However, with declining birthrates among the Chinese electorates, this support may not be forthcoming in future elections. We also provide insights for both coalitions to consider in developing strategies for the next election.

The Role of Life Satisfaction on Election Voting Preferences in Malaysia

Ethnicity and urbanisation have been the most studied predictors of electoral outcomes in Malaysian general elections. In this study, we examine life satisfaction in the political science literature that can also influence Malaysian electoral outcomes. Using data from the World Values Survey conducted in Malaysia shortly before the General Election in 2013, we leverage on responses to a survey question asking respondents to indicate the political party they would vote for if a national election were held the next day, and empirically investigate the relationship between life satisfaction and voting preferences. We find that respondents with higher levels of life satisfaction will have a higher probability of voting for the ruling party, with the magnitude of this effect relatively comparable to that of the ethnic effect. We also empirically show that this outcome is due to the preference for status quo, defined on two levels, in the Malaysian political scene.

Rejoinder: The Authors Respond to “Interpreting Ethnicity and Urbanization in Malaysia's 2013 General Election”

In this article we respond to Thomas Pepinskys commentary on our article “2013 Malaysian Elections: Ethnic Politics or Urban Wave?” (both in this issue). We confirm that both ethnicity and urbanization play important roles in determining the incumbent ruling partys percentage vote share in the thirteenth general election. In doing so, we address the various econometric issues raised by Pepinsky and clearly explain the advantages of our econometric methodology vis-a-vis the OLS analysis espoused by Pepinsky. Our main results indicate that Barisan Nationals (BN) vote share from Bumiputera voters, regardless of urbanization levels of the parliamentary constituency, is below the 50 percent threshold. This result is surprisingly compensated by the more than 50 percent support for BN when Chinese voters are a small minority of the electorate. We also argue that Pepinskys statement that Malay voters are predominantly rural voters is inaccurate and provide evidence to the contrary.