Contribution of processing trade activities to Malaysia’s domestic economy

Transformation of the current international trade pattern has mislead the information on how much Malaysia export are really made in Malaysia. Increased international outsourcings have spurred trade in intermediate goods, which is termed as processing trade. Malaysia is one the countries that...

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Main Author:	Hamid, Nur Adilah
Format:	Thesis
Language:	English
Published:	2016
Subjects:	International trade - Economic conditions - Malaysia
Online Access:	http://psasir.upm.edu.my/id/eprint/66844/1/FEP%202016%2034%20IR.pdf
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id	my-upm-ir.66844
record_format	uketd_dc
spelling	my-upm-ir.668442019-02-04T01:40:34Z Contribution of processing trade activities to Malaysia’s domestic economy 2016-12 Hamid, Nur Adilah Transformation of the current international trade pattern has mislead the information on how much Malaysia export are really made in Malaysia. Increased international outsourcings have spurred trade in intermediate goods, which is termed as processing trade. Malaysia is one the countries that actively participating in the processing trade activities in the Asian region. While empirical evidences in other countries clearly indicate the unfavorable effects on local economies, empirical works to quantify the impact of increased processing trade in Malaysia are clearly lagged behind. The fact is that the conventional national accounts framework does not separate the processing trade activities in the calculation of gross domestic products (GDP). In this study, we further improve the GDP accounting by separating the manufacturing sectors according to domestic and processing trade sectors, and integrating them consistently in a socalled ‘dualistic’ input-output table. Results clearly show that the processing trade sectors do not only associated with higher foreign content but also have lower growth linkages to the domestic economy. From the overall processing exports, only 39.6% are benefited to the domestic value added while another 60.4% are attributed to foreign content. Based on the findings, we strongly suggest the government to review the current Free Industrial Zone policies by putting more emphasize on the domestic manufacturing sectors and finding new focused sectors for exports. International trade - Economic conditions - Malaysia 2016-12 Thesis http://psasir.upm.edu.my/id/eprint/66844/ http://psasir.upm.edu.my/id/eprint/66844/1/FEP%202016%2034%20IR.pdf text en public masters Universiti Putra Malaysia International trade - Economic conditions - Malaysia
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English
topic	International trade - Economic conditions - Malaysia
spellingShingle	International trade - Economic conditions - Malaysia Hamid, Nur Adilah Contribution of processing trade activities to Malaysia’s domestic economy
description	Transformation of the current international trade pattern has mislead the information on how much Malaysia export are really made in Malaysia. Increased international outsourcings have spurred trade in intermediate goods, which is termed as processing trade. Malaysia is one the countries that actively participating in the processing trade activities in the Asian region. While empirical evidences in other countries clearly indicate the unfavorable effects on local economies, empirical works to quantify the impact of increased processing trade in Malaysia are clearly lagged behind. The fact is that the conventional national accounts framework does not separate the processing trade activities in the calculation of gross domestic products (GDP). In this study, we further improve the GDP accounting by separating the manufacturing sectors according to domestic and processing trade sectors, and integrating them consistently in a socalled ‘dualistic’ input-output table. Results clearly show that the processing trade sectors do not only associated with higher foreign content but also have lower growth linkages to the domestic economy. From the overall processing exports, only 39.6% are benefited to the domestic value added while another 60.4% are attributed to foreign content. Based on the findings, we strongly suggest the government to review the current Free Industrial Zone policies by putting more emphasize on the domestic manufacturing sectors and finding new focused sectors for exports.
format	Thesis
qualification_level	Master's degree
author	Hamid, Nur Adilah
author_facet	Hamid, Nur Adilah
author_sort	Hamid, Nur Adilah
title	Contribution of processing trade activities to Malaysia’s domestic economy
title_short	Contribution of processing trade activities to Malaysia’s domestic economy
title_full	Contribution of processing trade activities to Malaysia’s domestic economy
title_fullStr	Contribution of processing trade activities to Malaysia’s domestic economy
title_full_unstemmed	Contribution of processing trade activities to Malaysia’s domestic economy
title_sort	contribution of processing trade activities to malaysia’s domestic economy
granting_institution	Universiti Putra Malaysia
publishDate	2016
url	http://psasir.upm.edu.my/id/eprint/66844/1/FEP%202016%2034%20IR.pdf
_version_	1747812415165169664

Contribution of processing trade activities to Malaysia’s domestic economy

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