An Examination of the Government Spending and Economic Growth Nexus for Malaysia Using the Leveraged Bootstrap Simulation Approach

Chor Foon Tang 연세대학교 동서문제연구원 2009 Global economic review Vol.38 No.2

Re-visiting the Savings-Led Growth Hypothesis and Its Stability in East Asian Economies

Chor Foon Tang,Eu Chye Tan 한국국제경제학회 2017 International Economic Journal Vol.31 No.3

The causal relationships between savings and economic growth have been given special attention because it has significant implication on policy-making. Nevertheless, the direction of causality remains unclear as previous studies failed to provide persuasive evidence to support the savings-led growth hypothesis. Therefore, the primary aim of this study is to empirically re-investigate the savings–growth nexus in selected East Asian economies. It covers the quarterly sample period from 1970:Q1 to 2011:Q4. Our empirical results reveal that savings, economic growth and some other variables are cointegrated in these economies. Additionally, the causality results exhibit that the causal effect from savings to economic growth is stable over the period of analysis. Therefore, the probability of success in boosting economic growth through any policy action to induce greater savings is the greatest in the case of East Asian economies.

Dynamic inter-relationships among tourism, economic growth and energy consumption in India

Chor Foon Tang,Aviral Kumar Tiwari,Muhammad Shahbaz 한국자원공학회 2016 Geosystem engineering Vol.19 No.4

This study attempts to explore the dynamic causal and inter-relationships among tourism, economic growth and energy consumption in India. This study covers the annual data from 1971 to 2012. This study applies the cointegration and generalised variance decomposition methods to verify the relationship. The bounds testing approach to cointegration and the Gregory–Hansen test for cointegration with structural break consistently reveal that energy consumption, tourism and economic growth in India are cointegrated. We find that tourism and economic growth strongly affects energy consumption in the long-run. Additionally, we also find that tourism and economic growth in India are inter-related, but the causal effect of tourism on economic growth is stronger than the other way around in both the short- and long-run. Therefore, this study concludes that the tourism-led growth hypothesis is valid but the energy-led growth hypothesis is invalid in India. With such findings, we can confirm that tourism is an important catalyst of growth to the Indian economy. Therefore, policy-makers should promote and expand tourism industry in order to sustain the process of economic growth and development in India.

Does the Source of Foreign Direct Investment Matter to Economic Growth in Malaysia?

Chor Foon Tang,Eu Chye Tan 연세대학교 동서문제연구원 2018 Global economic review Vol.47 No.2

Foreign direct investment (FDI) is often viewed as a potential contributor to a country’s economic growth and development. However, the extent of the contribution may depend upon the source of such investment inflows. This paper assesses the contribution of inward FDI to Malaysia’s economic growth using investment data disaggregated by source over the period, 2008:Q1–2016:Q3. Due to the mixed orders of integration of the series involved, the autoregressive distributed lag (ARDL) framework is employed to conduct the assessment. The econometric results indicate that the source of the FDI does matter greatly when considering the extent of its spin-off for the local economy. Specifically, FDI flows from North America and Southeast Asia contribute more significantly to Malaysia’s economic growth than FDI flows from Central and South America, Northeast Asia and Oceania.

The Money-prices Nexus for Malaysia: New Empirical Evidence from the Timevarying Cointegration and Causality Tests

CHOR FOON TANG 연세대학교 동서문제연구원 2010 Global economic review Vol.39 No.4

The main objective of this study is to empirically re-investigate the money-prices nexus for Malaysia through the Johansen multivariate cointegration and the modified Wald (MWALD) causality techniques. This study covered the monthly dataset from 1971:M1 to 2008:M11. The Johansen cointegration test suggests that the variables under investigation are comove in the long run. Furthermore, the MWALD causality test shows a bidirectional causal relationship between money supply (M2) and aggregate prices, meaning that both the monetarist’s and also the structuralists’ views are vindicated in the Malaysian economy. However, the time-varying cointegration and causality tests indicate that the cointegrating and also the causal relationships are not stable over the analysis period. These results suggest that inflation in Malaysia is not purely a monetary phenomenon. Therefore, implementing a tighter monetary policy may not be an effective macro-economic instrument in managing the inflationary behaviour in the Malaysian economy.

The Extent of Growth Dependence of Selected East Asian Economies on the USA

Eu Chye Tan,CHOR FOON TANG 연세대학교 동서문제연구원 2013 Global economic review Vol.42 No.1

This paper assesses the extent of economic growth dependence of a number of East Asian countries on the USA based upon the quarterly data series spanning from the early 1990s. Generally, the empirical results suggest weak links of these economies to the US contrary to a-priori expectations. Only the GDP of Taiwan has a long-run relationship with the USA. Though Granger causal links from the USA to Japan, Malaysia, the Philippines and Taiwan exist, they are projected as weak by the impulse response functions. Co-integration and short-run causal links with the USA are ruled out in the case of China, Hong Kong, South Korea, Singapore and Thailand. Contemporaneous correlations of output growth shocks merely exist between the USA on one hand and Indonesia and Taiwan on the other. Hence, all this would suggest that these East Asian economies are generally in a position to grow quite independently of the USA, barring a global economic crisis. Nevertheless, they should strive for greater resilience by raising domestic consumption so that they need not always count on countercyclical macroeconomic policy measures to provide a buffer against external shocks.

The nexus of electricity consumption and economic growth in Gulf Cooperation Council economies: evidence from non-stationary panel data methods

Usama Al-Mulali,Chor Foon Tang,Bee Wah Tan,Ilhan Ozturk 한국자원공학회 2019 Geosystem engineering Vol.22 No.1

This paper investigates the electricity-growth nexus of Gulf Cooperation Council (GCC) member countries from 1980 to 2014. To achieve the goal of this research, both panel cointegration and causality approaches are utilised to examine the long-term and causal relationships between variables. Empirical results confirm the presence of cointegration between variables. Moreover, this study finds that electricity consumption affects the long-term economic growth. Given that GCC member countries are energy-dependent economies, policies that aim to conserve energy consumption may jeopardise economic growth.

The role of institutions at the nexus of logistic performance and foreign direct investment in Asia

Soh Keng Lin,Wong Wai Peng,Tang Chor Foon 한국해운물류학회 2021 The Asian journal of shipping and Logistics Vol.37 No.2

Foreign Direct Investment (FDI) plays an important part in the economic growth of developing Asia and logistics capability is a crucial factor in FDI location choice. Till today, research investigating Logistics Performance (LP) and FDI in Asia are still lacking and rather inconclusive and not standardised. Using a total of 31 Asian countries covering 2007 through 2017, the study critically investigates the impact of LP on FDI using static panel regression method. The results demonstrate that while LP significantly impact FDI, there is a threshold effect of institutional quality in the LP-FDI relationship. Specifically, this paper found that the impact of LP on FDI varies across the perceived level of institutional quality i.e., the effect is positive only before certain threshold level of institutional quality, after which the effect of LP on FDI is reversed. This finding suggests that the LP-FDI nexus is contingent on the perceived level of institutional quality, thus supporting the idea that innovations (i.e., creativity and flexibility embedded within a sound institutional framework) is potent in delivering long-run LP-FDI development in Asia.