IMPACT OF EXPORT, IMPORT AND GROWTH: EVIDENCE USING ECONOMETRIC ANALYSIS IN MALAYSIA

Abstract

The study was conducted to obtain information on the relationship between export, import and economic growth in Malaysia. The annual data obtained from the World Bank which contains data from 1980 to 2016. The methods used to achieve this purpose are Philips Perron, Johansen Cointegration Test as well as Granger Causality Test. The unit root Test which economic growth and export series, as well as imports, became stationary when running the first difference. There was a cointegration relationship between economic growth, exports and even imports. Results also indicated that there was a short-term causal effect between GDP and import in the short term and two-way links found between GDP and imports. Compared to the two-way relationship between GDP and imports, we find that the relationship only occurs from the direction of GDP to export. It is significant to know the relationship status between these three series. Among the suggestions that are considered beneficial is to have a good policy and aim to continue if we want economic growth to be enhanced. The results provide evidence that imports as a source of economic growth in Malaysia