Theexport‐ledgrowth in Malaysia: Does economic policy uncertainty and geopolitical risks matter?

Abstract

In spite of the fact that the connection between exports of goods and services and economic growth has for quite some time been talked about, the examination of the relationship in light of recent global events such as economic policy uncertainty and geopolitical risks is yet to be given the required attention. Various empirical researches have demonstrated that the export‐led growth hypothesis (ELGH) holds for singular nations in terms of overall economic development. However, this study re‐examines the ELGH with a special focus on the absolute and mediating impact of economic policy uncertainties and geopolitical risks. With data spanning the period 1980 to 2018. Empirical results from the Autoregressive distributed lag model and the error correction models suggest that for Malaysia, Economic Policy Uncertainty (EPU) exerts a negative impact on growth evens as its moderating impact on exports leads to negative economic growth. On the other hand, the impact of Geopolitical risk on growth is both negative and positive but insignificant in the short‐run and long‐run respectively. The study suggests the government of Malaysia works to ensure macroeconomic and political stability to achieve export‐driven growth in the country.

Time and frequency co‐movement between economic policy uncertainty and inflation: Evidence from Japan

“…Sahinoz and Erdogan Cosar's (2018) findings also showed that economic growth, consumption, and investment were negatively affected by EPU and reacted more negatively to the high EPU. Likewise, Adedoyin et al (2020) highlighted that EPU has a negative effect on growth evens as its moderating effect on exports causes negative economic growth in Malaysia.…”

The Impact of Export Promotion Programs on Export Competitiveness and Export Performance of Craft Products

“…According to Mata et al [31], financial and marketing support from government policy may help young entrepreneurial firms to overcome the susceptibility of being new and small while gaining competitive export capabilities. Adedoyin et al [32] added that the government should ensure macroeconomic and political stability to achieve export. Accordingly, we propose the hypothesis that H1: export promotion program can influence export competitiveness.…”

Japan-US bilateral commodity-level trade and trade policy-related uncertainty under the COVID-19 pandemic: the nonlinear ARDL model

“…Wei (2019) used the VAR model for China and found that the global EPU index has negative impacts on Chinese real export. Adedoyin et al (2020) used the export-led growth hypothesis (ELGH) for Malaysia and found that the EPU index has moderately negative impacts on export flows for this country. Jia et a.…”