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This paper attempts to identify the key factors behind Malaysia's remarkable savings performance. Drawing on the life cycle theory, the saving function is estimated by incorporating other relevant structural features and institutional settings of the Malaysian economy into the specification. Particular emphasis has been placed on the roles of financial factors in mobilizing funds in the private sector. The results suggest that financial deepening and increased banking density tend to encourage private savings. Development of insurance markets and liberalization of the financial system, however, tend to exert a dampening effect on private savings. [ABSTRACT FROM AUTHOR]

This paper examines the determinants of private investment in Malaysia, with an emphasis on the postcrisis investment slumps. A static private investment function is derived from the neoclassical framework, with appropriate modifications to account for the structural features observed in the country. To introduce dynamics into the model, we adopt a cost minimization problem, which assumes firms optimize investment levels with respect to a quadratic loss function. The results suggest that the availability of financial resources in the economy has a significant positive impact on private investment. Macroeconomic uncertainty exerts a negative influence on the investment climate in the private sector. Both foreign direct investment and public investment are found to have a complementary effect on private investment. Consistent with the prediction of the neoclassical model, a higher level of aggregate output raises private investment, whereas the user cost of capital has the opposite impact. ( JEL O 16, O 53) [ABSTRACT FROM AUTHOR]

This article examines the FDI-growth nexus in the small open economy of Malaysia by controlling for the level of financial development. Financial development is proxied by a composite index, which is a summary measure of four financial development indicators. Using time-series data from 1965 to 2004, the results show that FDI and financial development are positively related to output in the long-run. The impact of FDI on output is enhanced through financial development. To supplement these findings, we assess the causal relationships between the variables using the recent causality tests available in the literature. The results indicate that economic growth causes FDI growth in the long-run, but no feedback relationship is observed. [ABSTRACT FROM AUTHOR]

Motivated by the concern of a persistent decline in total investment in Malaysia during the post-crisis era, this article examines the long-run relationship between private domestic investment (PDI), public investment and foreign direct investment (FDI) in Malaysia. Using multivariate cointegration techniques, the results indicate a fairly robust cointegrated relationship between these variables during the period 1960 to 2003. Both public investment and FDI are found to be complementary to, rather than competing with, PDI. [ABSTRACT FROM AUTHOR]

This paper provides an empirical assessment of the effects of financial sector policies on development of the financial O,stem in Malaysia over the period 1959 2005. The technique of principal component analysis is used to construct a summary measure of interest rate policies in order to account for the joint influence of various interest rate controls imposed on the Malaysian financial system. The results show that economic development, interest rate controls, and capital liquidity requirements positively affect the level of financial development. However, greater trade openness, higher statutory reserve requirements, and the presence of directed credit programs appear to be harmful for development of the Malaysian financial system. The results provide some support to the argument that some form of financial restraints may help promote financial development. [ABSTRACT FROM AUTHOR]

Abstract: The objective of this paper is to examine the long-run relationship between output, pollutant emissions, and energy consumption in Malaysia during the period 1971–1999. To supplement the findings of cointegrating analysis, we assess the causal relationships between the variables using the recent causality tests available in the literature. The results indicate that pollution and energy use are positively related to output in the long-run. We found a strong support for causality running from economic growth to energy consumption growth, both in the short-run and long-run. [Copyright &y& Elsevier]

This article examines whether domestic saving rate leads to higher domestic investment rate in the case of Malaysia. We argue that the results obtained from cross-sectional studies are not able to address this issue satisfactorily and highlight the importance of individual country case studies. Using the recently developed autoregressive distributed lag bounds testing procedure, the results reveal a robust cointegrated relationship between domestic saving and investment rates during the period 1965 to 2003. [ABSTRACT FROM AUTHOR]

This paper examines the extent to which financial development contributes to output expansion in Malaysia, during the period 1960-2003. An augmented neoclassical growth framework is adopted to provide an evaluation of the impact of financial sector development on economic development. Using the recently developed ARDL bounds procedure, the results show that aggregate output and its determinants are cointegrated in the long run. The results suggest that financial development, private capital stocks and the labour force exert a positive impact on economic development whereas the accumulation of public capital appears to curtail output expansion in the long run. [ABSTRACT FROM AUTHOR]