Financial structure that contributes towards economic growth of Malaysia in the short-run and long-run

The study aims to examine the relationship between the economic growth with bank activity, bank size, market activity, market size, and market efficiency in short-run and long-run. Effort is also taken to determine whether bank-based financial structure is a complement or substitute to market-based...

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Main Author: Muhamad Shameer Mohammad Fahmi
Format: Thesis
Language:English
Published: 2013
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Online Access:https://eprints.ums.edu.my/id/eprint/8944/1/mt0000000324.pdf
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spelling my-ums-ep.89442017-10-26T02:18:01Z Financial structure that contributes towards economic growth of Malaysia in the short-run and long-run 2013 Muhamad Shameer Mohammad Fahmi HC Economic history and conditions The study aims to examine the relationship between the economic growth with bank activity, bank size, market activity, market size, and market efficiency in short-run and long-run. Effort is also taken to determine whether bank-based financial structure is a complement or substitute to market-based financial structure in influencing economic growth. The yearly secondary data ranging from 1980 to 2010 obtained from Bank Negara Reports, Malaysian Financial Report, Department of Statistics Malaysia Report, the Bursa Malaysia Reports and the World Bank Reports are used. The Ordinary Least Square estimation results reveal that Adjusted R-squared is low. However, the estimated Durbin Watson value indicates that the data has an autocorrelation problem. In Unit Root Test results, bank activity, bank size, market activity, and market size have a unit root problem at the level form, but all the variables are found to be integrated at first difference. Next, VAR(p) model determines the optimal lag length of 2. Moreover, co-integration test shows that bank activity, bank size, market activity, market size, and market efficiency are found to be significant in affecting economic growth in long-run. Market efficiency is found to have negative and greater effect on the economic growth while bank size is found to have negative and less effect. Therefore bank based financial structure acts as a substitute to market-based financial structure in affecting economic growth. Finally, the result indicates that there is no short-run relationship between dependent variable and independent variables in the Vector Error Correction model. In conclusion, some recommendations and future study are discussed. 2013 Thesis https://eprints.ums.edu.my/id/eprint/8944/ https://eprints.ums.edu.my/id/eprint/8944/1/mt0000000324.pdf text en public masters University Malaysia Sabah School of Business and Economics
institution Universiti Malaysia Sabah
collection UMS Institutional Repository
language English
topic HC Economic history and conditions
spellingShingle HC Economic history and conditions
Muhamad Shameer Mohammad Fahmi
Financial structure that contributes towards economic growth of Malaysia in the short-run and long-run
description The study aims to examine the relationship between the economic growth with bank activity, bank size, market activity, market size, and market efficiency in short-run and long-run. Effort is also taken to determine whether bank-based financial structure is a complement or substitute to market-based financial structure in influencing economic growth. The yearly secondary data ranging from 1980 to 2010 obtained from Bank Negara Reports, Malaysian Financial Report, Department of Statistics Malaysia Report, the Bursa Malaysia Reports and the World Bank Reports are used. The Ordinary Least Square estimation results reveal that Adjusted R-squared is low. However, the estimated Durbin Watson value indicates that the data has an autocorrelation problem. In Unit Root Test results, bank activity, bank size, market activity, and market size have a unit root problem at the level form, but all the variables are found to be integrated at first difference. Next, VAR(p) model determines the optimal lag length of 2. Moreover, co-integration test shows that bank activity, bank size, market activity, market size, and market efficiency are found to be significant in affecting economic growth in long-run. Market efficiency is found to have negative and greater effect on the economic growth while bank size is found to have negative and less effect. Therefore bank based financial structure acts as a substitute to market-based financial structure in affecting economic growth. Finally, the result indicates that there is no short-run relationship between dependent variable and independent variables in the Vector Error Correction model. In conclusion, some recommendations and future study are discussed.
format Thesis
qualification_level Master's degree
author Muhamad Shameer Mohammad Fahmi
author_facet Muhamad Shameer Mohammad Fahmi
author_sort Muhamad Shameer Mohammad Fahmi
title Financial structure that contributes towards economic growth of Malaysia in the short-run and long-run
title_short Financial structure that contributes towards economic growth of Malaysia in the short-run and long-run
title_full Financial structure that contributes towards economic growth of Malaysia in the short-run and long-run
title_fullStr Financial structure that contributes towards economic growth of Malaysia in the short-run and long-run
title_full_unstemmed Financial structure that contributes towards economic growth of Malaysia in the short-run and long-run
title_sort financial structure that contributes towards economic growth of malaysia in the short-run and long-run
granting_institution University Malaysia Sabah
granting_department School of Business and Economics
publishDate 2013
url https://eprints.ums.edu.my/id/eprint/8944/1/mt0000000324.pdf
_version_ 1747836331830018048