Malaysian Journal of Economic Studies
type: channel
description: The Malaysian Journal of Economic Studies (previously the Kajian Ekonomi Malaysia) is published twice a year in June and December by the Persatuan Ekonomi Malaysia (Malaysian Economic Association) with the Faculty of Business and Economics, Universiti Malaya.
publisher: Faculty of Business & Economics, Universiti Malaya
language: en
publication name: Malaysian Journal of Economic Studies
issn: 1511-4554
items: Shadow Economy and Foreign Direct Investment Inflows: Evidence from Malaysia
items: Well-being in Retirement: Examining the Role of Retirement Resources, Moderated by Gender and Caring for Grandchildren
items: Land-use Rights and Credit Access in Vietnam: The Role of Formal and Informal Lending in Financial Inclusion
items: Factors Influencing Expenditure on Unhealthy Foods Among the Urban Poor in Malaysia
items: Spatial Pattern of the Association of E-commerce Adoption and Socio-digital Setting
items: Nonlinear Dynamics of Information and Communication Technology, Income Diversification, and Competitiveness in Emerging Banking Markets: Evidence from Vietnam
items: Impact of Carbon Pricing on Renewable Energy: A Comparative Study of Developing and Developed Countries
items: Quantitative Easing and Tightening Effects on Volatility Transmission in ASEAN’s Emerging Financial Markets
items: Mrs. Khoo Siew Mun: Publications and Writing
items: Mrs. Khoo Siew Mun: A Tribute
items: Book Review: Globalization: Perak’s Rise, Relative Decline, and Regeneration
items: Time-Varying Correlation and Quantile Relationship between Oil Prices and Regional Green Markets
items: Survival of the Weakest: Listed Zombie Firms in Malaysia’s Industrial Products and Services Sector
items: Market Power in an Emerging Market Economy: Evidence from Philippine Publicly Listed Corporations
items: Banks’ Contribution and Exposure to Systemic Risk amid Natural Disasters: Evidence from Malaysia
items: Domestic Economic Policy Uncertainty, US Macroeconomic Uncertainty and Corporate Cash Holdings: International Evidence
items: Impact of Government Incentives on Digital Content Creators in Malaysia: An Empirical Study
items: Medium of Instruction in Education and Language Use: The Case of the Hakka in East Malaysia
items: Gender Disparities in Digital Employment in China
items: Job Polarisation: The Change of Nature of Task and Skill Needs
items: Human Capital, Amenities and Trade: The Case of Malaysia
items: Political Leadership Matters: Malaysia’s Unrealised Potential
items: Political Leadership Matters: The Case of Four Successful East Asian Economies
items: Malay Entry into Business through Scaling the Heights of Corporate Malaysia from mid-1980s – An Assessment
items: The Role of Green Taxation Governance in China: A Review of the Development and Impacts of Environmental Protection Tax
items: Does Environmental Factor Influence the Rating of Creditworthiness? A Comparative Analysis of Developed versus Developing Countries
items: Nexus between ESG Practice and Firm Performance: Are there any Stylised Facts?
items: Comparing the Causes and Consequences of the Asian and Global Financial Crises on Southeast Asia
items: The Bank of China: From a Turbulent Past to a Strategic Future – What Does Its Presence in Malaysia Show?
items: State-Business Relations and Public-Public Partnerships: China’s State-owned Enterprises in Southeast Asia

Shadow Economy and Foreign Direct Investment Inflows: Evidence from Malaysia
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description: Despite Malaysia’s reputation as one of the most attractive destinations for foreign direct investment (FDI) in Asia, the nation has experienced a downward trend in FDI flows since reaching a peak in 2011. This sustained decline warrants a critical examination of the shadow economy, a lesser-explored determinant of FDI, impeded by measurement challenges. By focusing on the roles of smuggling and tax evasion − two key components of the shadow economy − this study examines their impact on Malaysia’s attractiveness to foreign investors. Our research utilises data from Malaysian Customs annual reports from 1999 to 2018 and employs the autoregressive distributed lag technique to analyse the relationship between the shadow economy and FDI inflows. The findings reveal a significant negative impact: the uncertainties created by smuggling and tax evasion impose additional costs on investors, thereby deterring FDI. This study underscores the urgent need for Malaysia to enhance its investment climate through the establishment of transparent and unambiguous laws, rules and regulations, thereby reducing investor uncertainty and revitalising FDI inflows.
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creator: Tengku Rafidatul Akma Tengku Razali
creator: Tajul Ariffin Masron
creator: Mohd Hafez Kamarudin
rights: Copyright (c) 2025
date: 2025-12-30
publication date: 2025-12-30
starting page: 349
ending page: 371
doi: 10.22452/MJES.vol62no2.7

Well-being in Retirement: Examining the Role of Retirement Resources, Moderated by Gender and Caring for Grandchildren
type: item
description: We examined the impact of financial resources (FR), health resources (HR), social resources (SR) and psychological resources (PR) on retirement well-being (RWB) among older adults in Malaysia. Using a quantitative approach with non-probability sampling, a self-administered questionnaire was distributed to individuals aged 60 years and above, yielding 166 usable responses. Data were analysed using multivariate regression analysis based on their diverse backgrounds. The findings reveal that all four types of retirement resources significantly and positively affect RWB, with PR emerging as the strongest predictor, followed by FR. Gender moderates the relationship between FR, SR and PR, and RWB, indicating that men’s RWB is more influenced by FR and PR, while women benefit more from SR, though excessive SR can lower their RWB. The moderating effect of caring of grandchildren (CG) is insignificant for most resources except PR, where non-caregivers require strong PR to achieve similar levels of RWB. The findings highlight the importance of enhancing psychological resilience, financial resilience and social support among older adults. Practical implications include promoting health and wellness programs within the private sector and developing targeted policy interventions to strengthen retirees’ overall well-being and quality of life in Malaysia.
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creator: Phaik Nie Chin
creator: Phaik Yuet Tung
creator: Kean Siang Ch’ng
rights: Copyright (c) 2025
date: 2025-12-30
publication date: 2025-12-30
starting page: 319
ending page: 347
doi: 10.22452/MJES.vol62no2.6

Land-use Rights and Credit Access in Vietnam: The Role of Formal and Informal Lending in Financial Inclusion
type: item
description: This paper examines how land-use rights affect household access to both formal and informal credit and how different credit sources relate to household income, using the 2020 Vietnam Household Living Standards Survey (VHLSS). We estimate probit models for borrowing choice across five lender types, Tobit models for loan amounts, and ordinary least squares (OLS) models for income effects, incorporating interaction terms to capture whether owned land is used as collateral. Results indicate that when land is pledged as collateral, loan amounts rise in both markets; for interest rates, formal pricing is largely policy invariant, while in informal markets collateral primarily sharpens the negative rate–scale slopes rather than uniformly lowering levels. We discuss mechanisms explaining why informal credit can have positive income effects (speed, contractual flexibility and embedded information) and highlight the policy implications of issuing land-use rights certificates and improving lending transparency.
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creator: Khoa A. Trinh
rights: Copyright (c) 2025
date: 2025-12-30
publication date: 2025-12-30
starting page: 301
ending page: 318
doi: 10.22452/MJES.vol62no2.5

Factors Influencing Expenditure on Unhealthy Foods Among the Urban Poor in Malaysia
type: item
description: Consumption of unhealthy foods possesses harmful effects on health, thereby increasing the disease burden. If low-income people, especially those living in urban areas, do not make efforts to reduce their consumption on unhealthy foods, the health‒economic costs borne by them will rise. To date, there is a growing number of Malaysian studies that examine factors affecting consumption expenditure on unhealthy foods, but none has paid attention to the urban poor. The objective of this study is to narrow this research gap. A seemingly unrelated regressions model was utilised to estimate the effects of sociodemographic and health factors on expenditure of oil and fats, processed foods, sugar-sweetened beverages and alcoholic drinks. Income and household size were positively associated with expenditure on unhealthy foods. Individuals who were between 61 and 70 years old had higher expenditure on unhealthy foods than their younger counterparts. The Chinese spent less on certain unhealthy foods compared to the Malays. Being employed, having tertiary-level education, being married and living with chronic diseases increased spending on unhealthy foods. These findings suggest that the Malaysian government should consider increasing the tax on sugar-sweetened beverages and using health campaigns to educate the urban poor about the risks of unhealthy foods.
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creator: Yong Kang Cheah
creator: Mohd Jamil Sameeha
creator: Che Wel Che Aniza
creator: Mohd Sakri Anis Munirah
creator: Sivabalan Shashidharan
creator: Adila Fahmida Saptari
creator: Sirinya Phulkerd
creator: Elaine Q. Borazon
creator: Bee Koon Poh
rights: Copyright (c) 2025
date: 2025-12-30
publication date: 2025-12-30
starting page: 277
ending page: 299
doi: 10.22452/MJES.vol62no2.4

Spatial Pattern of the Association of E-commerce Adoption and Socio-digital Setting
type: item
description: This study applies the multiscale geographically weighted regression to investigate the spatial behaviour of e-commerce and the relationship with digital knowhow level across provinces in Indonesia. The model was developed using e-commerce data from the Indonesian National Statistics Board and the Ministry of Information and Communication of 2022. The result shows that only two variables had a significant impact on e-commerce adoption, namely access to the Internet and Generation X population. Furthermore, each variable has a different direction of a strong effect on e-commerce adoption levels. These results show that the covariates comprise a spatial barrier to adopting e-commerce and enrich the current understanding of e-commerce at the local level. Based on the result, policymakers can develop strategies to increase e-commerce adoption through promotion and campaign initiatives and target these at geographically strategic locations.
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creator: Rifan Ardianto
rights: Copyright (c) 2025
date: 2025-12-30
publication date: 2025-12-30
starting page: 251
ending page: 275
doi: 10.22452/MJES.vol62no2.3

Nonlinear Dynamics of Information and Communication Technology, Income Diversification, and Competitiveness in Emerging Banking Markets: Evidence from Vietnam
type: item
description: This study examines the effects of information and communication technology (ICT) adoption and income diversification (IDI) on bank competitiveness in emerging economies, with evidence from Vietnam. Both ICT and IDI serve as strategic drivers of performance, yet their joint and nonlinear impacts remain underexplored in developing financial systems undergoing digital transformation. Using a dynamic panel of 29 Vietnamese commercial banks from 2010 to 2022, the study employs the system generalized method of moments (S-GMM) estimator to address endogeneity and capture nonlinear and interaction effects. Bank competitiveness is measured by the Lerner index, with controls for bank-specific and macroeconomic factors, including the COVID-19 shock. The results indicate inverted U-shaped relationships between ICT, IDI and competitiveness, implying diminishing returns beyond optimal thresholds. The negative interaction between ICT and IDI suggests that simultaneous overinvestment may weaken competitive advantages, while macroeconomic volatility further moderates these effects. The study contributes to the literature by revealing the nonlinear and interactive mechanisms through which digital transformation and diversification jointly shape bank competitiveness in a developing economy, offering practical implications for balancing innovation and diversification strategies.
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creator: Thuy Tu Pham
rights: Copyright (c) 2025
date: 2025-12-30
publication date: 2025-12-30
starting page: 231
ending page: 250
doi: 10.22452/MJES.vol62no2.2

Impact of Carbon Pricing on Renewable Energy: A Comparative Study of Developing and Developed Countries
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description: The global energy transition is crucial in tackling climate change and achieving sustainable development, with renewable energy playing a central role in replacing fossil fuels. Therefore, many countries have implemented carbon pricing policies to internalise environmental externalities. While most of the existing literature focuses on the impact of such policies on carbon dioxide emissions, their influence on renewable energy capacity remains underexplored. We examine the impact of carbon pricing policies ‒ emissions trading schemes and carbon taxes ‒ on renewable energy capacity across 18 developing and 21 developed countries from 2006-2022. Given that the standard difference-in-differences approach may violate the parallel trends assumption due to cross-country heterogeneity, we employ a combination of propensity score matching and staggered DiD to mitigate selection bias and improve causal inference. We find that carbon pricing policies significantly increase renewable energy capacity in developing countries, both in the short run and long run. However, implementation of these policies appears to reduce renewable energy capacity in developed countries, possibly due to policy design, market maturity, or regulatory overlap. The findings highlight the importance of strengthening carbon pricing in developing countries, while developed economies may require more targeted reforms or complementary policies to enhance renewable energy development.
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creator: Fei Zhao
creator: Chor Foon Tang
rights: Copyright (c) 2025
date: 2025-12-30
publication date: 2025-12-30
starting page: 209
ending page: 230
doi: 10.22452/MJES.vol62no2.1

Quantitative Easing and Tightening Effects on Volatility Transmission in ASEAN’s Emerging Financial Markets
type: item
description: This study examines the volatility transmission among four emerging financial markets in the ASEAN region, comprising Thailand, Malaysia, Indonesia and the Philippines, during quantitative easing (QE) and quantitative tightening (QT) policies. A copula-based GARCH model is used to investigate the relationship among the volatility of stock market returns in these four countries and to explore the relationship among their exchange rate returns. Daily data were divided into two periods: the QE period covered 23/3/2020–15/3/2022, and the QT period covered 16/3/2022–13/2/2023. The findings show the relationship among the volatility of stock market returns across four countries, revealing that upper-tail dependence is more prominent during periods of QE than QT. Furthermore, the volatility of exchange rate returns across countries tends to correlate more during periods of QT. This study provides empirical evidence of integration among the financial markets of the four countries, and findings that are valuable for portfolio management. Investors seeking yields in ASEAN’s emerging financial markets should closely monitor the Federal Reserve’s monetary policy, particularly during periods of QT, which pose a higher risk of unexpected negative returns.
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creator: Teera Kiatmanaroch
creator: Ornanong Puarattanaarunkorn
rights: Copyright (c) 2025
date: 2025-06-15
publication date: 2025-06-15
starting page: 29
ending page: 48

Mrs. Khoo Siew Mun: Publications and Writing
type: item
description: N/A
subject: Articles
  topic: section
creator: Janaki Sinnasamy
creator: Ai Peng Koh
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 191
ending page: 203
doi: 10.22452/MJES.vol62no1.9

Mrs. Khoo Siew Mun: A Tribute
type: item
description: N/A
subject: Articles
  topic: section
creator: Persatuan Ekonomi Malaysia
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 173
ending page: 189
doi: 10.22452/MJES.vol62no1.8

Book Review: Globalization: Perak’s Rise, Relative Decline, and Regeneration
type: item
description: Sultan Nazrin Shah (2024). Globalization: Perak’s Rise, Relative Decline, and Regeneration. Oxford University Press.
subject: Book Review
  topic: section
creator: Hwok-Aun Lee
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 205
ending page: 207
doi: 10.22452/MJES.vol62no1.10

Time-Varying Correlation and Quantile Relationship between Oil Prices and Regional Green Markets
type: item
description: This study examines the time-varying equicorrelation and tail dependence between global oil prices and regional green markets. We use novel approaches, namely the GARCH-DECO model, Quantile-on-Quantile Regression (QQR), and Granger-causality in quantiles. The empirical findings show that global oil prices and renewable energy stock markets are inextricably linked. Specifically, there is a positive equicorrelation between global oil prices and clean energy stock markets. During times of turmoil, these trends become more pronounced, fostering contagion effects that diminish the benefits of diversification between renewable energy stocks and oil portfolios. The outcomes of the QQR technique reveal a heterogeneous interdependence structure between the oil and renewable energy stock markets across the entire distribution. Our results have significant implications for policymakers, investors and traders, as they may assist in understanding the behaviour of renewable energy and oil markets during periods of extreme market stress.
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creator: Nguyen Mau Ba Dang
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 153
ending page: 172
doi: 10.22452/MJES.vol62no1.7

Survival of the Weakest: Listed Zombie Firms in Malaysia’s Industrial Products and Services Sector
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description: This study investigates the prevalence and determinants of zombie firms in the industrial goods and services sector listed on Bursa Malaysia from 2011 to 2022. Using the Altman Z-score, Ohlson O-score, and selected financial indicators, we find that 22% of firms with adequate financial disclosures can be classified as “walking dead.” Panel logistic regression analysis reveals that the asset turnover ratio is the most significant predictor of zombification, though its marginal effect diminishes at higher levels. Leverage follows a non-linear relationship, where moderate debt increases the probability of zombification, but excessive debt appears to reduce it ‒ possibly reflecting creditor intervention. Interestingly, firms were less likely to be classified as zombies during the COVID-19 period, potentially due to government relief measures and regulatory forbearance. Despite clear signs of financial distress, most zombie firms are not designated as PN17 or GN3, suggesting limitations in current distress recognition frameworks. These findings offer important implications for policymakers seeking to strengthen regulatory mechanisms and ensure efficient capital allocation. Retail investors may also benefit from improved tools to identify and avoid zombie firms.
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creator: Yi Xin Tay
creator: Jia Xin Yeoh
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 131
ending page: 152
doi: 10.22452/MJES.vol62no1.6

Market Power in an Emerging Market Economy: Evidence from Philippine Publicly Listed Corporations
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description: This study investigates market power trends in an emerging market and developing economy (EMDE), the Philippines, by estimating markups for nonfinancial publicly listed corporations from 2001 to 2019 using a production-based methodology. While corroborating certain findings from advanced economies (AEs) regarding the positive relationship between firm size and markups, as well as markups and profitability, the substantial role larger firms play in markup movements, and the significant inter-sectoral variation in markups, this study reveals key distinctions. Notably, unlike AEs, the Philippines exhibits a more stable aggregate markup trend with limited evidence of consistent upward trend, potentially attributable to the heightened sensitivity of Philippine firms to macroeconomic fluctuations. This is further evidenced by the negative co-movement between markups and macroeconomic variables, such as interest rates and exchange rates. This study significantly contributes to the limited body of literature on market power in EMDEs by providing novel evidence from the Philippines and extending existing research on Philippine markups. These findings provide crucial insights for Philippine policymakers in enabling the development and implementation of more effective competition and antitrust policies to address market power dynamics and foster a more competitive landscape.
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creator: Regina M. Lizares
creator: Carlos C. Bautista
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 105
ending page: 129
doi: 10.22452/MJES.vol62no1.5

Banks’ Contribution and Exposure to Systemic Risk amid Natural Disasters: Evidence from Malaysia
type: item
description: This study evaluates the extent to which banks in Malaysia have contributed to and been impacted by systemic risk in the wake of natural disaster events during a period spanning from 1 January 2007 to 31 March 2022. Employing delta conditional value-at-risk measures, our findings reveal that natural disasters, akin to past crises such as the global financial crisis and the COVID-19 pandemic, elevate systemic risk in the banking sector, though the magnitude of their impact is relatively less severe. Additionally, we find that there were more instances, either during the natural disaster event or in its aftermath, where the banks increased their contribution to systemic risk compared to instances where they experienced heightened systemic risk exposure. In terms of timing of the reaction, our analysis shows that the market exhibits a notable delay, with both systemic risk contribution and exposure primarily increasing after the disaster event has concluded, rather than during its occurrence. These results underscore the critical need for climate resilience in the banking industry and provide important insights into the systemic risk implications of natural disasters, particularly in developing, bank-centric countries like Malaysia. They also inform the formulation of targeted policy measures to effectively mitigate these risks.
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creator: Nazrul Hazizi Noordin
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 79
ending page: 103
doi: 10.22452/MJES.vol62no1.4

Domestic Economic Policy Uncertainty, US Macroeconomic Uncertainty and Corporate Cash Holdings: International Evidence
type: item
description: This study examines the impact of two different types of uncertainty, which are domestic economic policy uncertainty and macroeconomic uncertainty stemming from the United States (US) on corporate cash holdings. Using a sample of 18 countries from 2003 to 2023, we find that both types of uncertainty positively associated with corporate cash holdings due to precautionary motives. Our results demonstrate that the US macroeconomic uncertainty has a greater influence over domestic economic policy uncertainty on corporate cash holdings decision. Further analysis indicates that the influences of both types of uncertainty on corporate cash holdings are more pronounced in developed countries.
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creator: Jiunn-Shyan Khong
creator: Swee-Sim Foong
creator: Chee-Wooi Hooy
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 49
ending page: 77
doi: 10.22452/MJES.vol62no1.3

Impact of Government Incentives on Digital Content Creators in Malaysia: An Empirical Study
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description: The emergence of the digital creative content industry in Malaysia, highlighted in the Twelfth Malaysia Plan, reflects the nation’s pursuit of a share in the global digital market. Government initiatives, manifested through grants and incentives, aim to bolster the industry, but their effectiveness remains uncertain. This study explores the impact of these initiatives on digital content creators, utilising firm-level databases from the Malaysia Digital Economy Corporation. Employing parametric tests, the stochastic frontier model, and the panel model, the research reveals that pairing small funds with effective developmental programs yields superior results. Grant recipients exhibit notable growth in job creation ‒ particularly among local skilled workers ‒ heightened research and development (R&D) activity, and increased productivity and profits. Future grant policies should incorporate knowledge sharing from successful recipients and emphasise mentoring, while also supporting industrial training for educators to align curricula with industry expectations.
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creator: Andrew Jia-Yi Kam
creator: Mohd Jalallul Alam Jasni Zain bin Mohd Isa
creator: Nazuraida binti Che Yusof
rights: Copyright (c) 2025
date: 2025-06-13
publication date: 2025-06-13
starting page: 1
ending page: 28
doi: 10.22452/MJES.vol62no1.1

Medium of Instruction in Education and Language Use: The Case of the Hakka in East Malaysia
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description: In the context of education in Malaysia, the challenges faced by the ethnic Chinese population consist of having to learn Malay and understanding the need to acquire fluency in English for economic mobility. Should they opt for vernacular education, they have also to deal with Mandarin, which is not their native/heritage language. Adopting a quantitative method, this study examines how Hakka communities in East Malaysia navigate the challenges and the consequences of their decisions on language use. Three specific questions are addressed: (a) What is the impact of medium of instruction in education on the language used by students at home and socially? (b) Has this impact changed across generations? (c) How has language use in school impacted identities? The findings show that Hakka language is used less in everyday conversations over time. The need to preserve Hakka language to retain their ethnic identity is perceived to be less important, more so among the younger generations. The issue is most evident among individuals who attended Mandarin speaking schools, particularly the Chinese independent schools. The findings suggest an association between the education language and the shift in both usage and knowledge of the heritage language toward the education language.
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creator: Seong Lin Ding
creator: Kim-Leng Goh
creator: Kee-Cheok Cheong
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 395
ending page: 411
doi: 10.22452/MJES.vol61no2.10

Gender Disparities in Digital Employment in China
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description: The rapid expansion of the digital economy has profoundly reshaped employ-ment dynamics in China. Drawing on microdata from the China General Social Surveys (CGSS) conducted in 2010 and 2021, this study delves into the evolving gender gap within China’s digital workforce. Through bivariate analyses and logistic regression, this research examines how gender intersects with various factors, including age, educational attainment, account status, number of children, internet usage, and geo-graphical region, to elucidate disparities in digital employment. Findings indicate a shift towards greater gender parity in the digital sector, notwithstanding enduring challenges for women. The responsibilities of childbearing and childrearing have constrained women’s engagement in digital occupations, although this impediment is diminishing. Educational achievements and internet usage emerge as pivotal determinants of digital employment for both genders. Workers in the more developed Eastern region exhibited higher likelihoods of digital employment than those in other regions. Diverse strategies are essential to tackle gender gaps in digital employment.
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creator: Huixin Mi
creator: Nai Peng Tey
creator: Siow Li Lai
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 373
ending page: 393
doi: 10.22452/MJES.vol61no2.9

Job Polarisation: The Change of Nature of Task and Skill Needs
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description: Job polarisation is the growth of high- and low-skilled employment relative to middle-skilled employment, typically in developed countries. Based on Khazanah Research Institute’s (KRI) descriptive study in 2017, Malaysia’s workforce experienced job polarisation over the last two decades. This study uses a different approach, i.e. multinomial logistic regression, to measure the probability of employment choice by different job categories to validate the presence of job polarisation in Malaysia. Unlike past research that used headcounts based on wage quantiles, this paper considers the individual and sectoral effects. This study confirms the job polarisation finding of KRI (2017) by comparing Malaysia’s employment structure between 2011 and 2017. Technology changes the methods and skills required to perform the same tasks. Besides, the adoption of technology depends on the firm’s or industry’s foresight of how technology may change the productivity of the worker. If the investment cost of a technology is greater than the training cost, firms may not adopt the technology. If an industry has the foresight of how technology may change the performance of tasks, and recruit workers in tandem with upskilling programmes, the phenomenon of job polarisation will fade out eventually.
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creator: Chen Chen Yong
creator: Elisa Jean Jion Nor Pau
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 351
ending page: 371
doi: 10.22452/MJES.vol61no2.8

Human Capital, Amenities and Trade: The Case of Malaysia
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description: Human capital plays an increasingly important role in economies undergoing structural transformation that involves technological upgrading and sustained trade competitiveness. Both production and consumption amenities are essential to develop, attract and support a workforce with high human capital. Different types of production and consumption amenities are relevant for different kinds of activities at various locations. As human capital growth is likely to be accompanied by worsening inequality, complementary policies are needed to promote inclusiveness without dampening human capital development.
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creator: Cassey Lee
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 331
ending page: 349
doi: 10.22452/MJES.vol61no2.7

Political Leadership Matters: Malaysia’s Unrealised Potential
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description: Malaysia was among five East Asian nations that successfully leveraged globalisation to achieve sustained high economic growth in the post-war period. But it has been unable to transition beyond upper-middle income to high-income status, unlike the other economies of Japan, South Korea, Taiwan and Singapore. In this paper, we appraise Malaysia’s political leadership to understand the reasons for its restrained growth. Specifically, we assess the demeanour and acumen of Malaysia’s prime ministers in economic decision-making. We find that the early leaders were more transformational and set Malaysia on the path to income growth. However, political leaders since the 1980s have been more transactional, using race and religious divides to entrench political power, cronyism and corruption resulting in a concomitant erosion in social capabilities. The result is serious deficits in the quality of human capital, critical-thinking capabilities of the civil service, and the integrity and independence of the institutions of economic governance. These constrain the ability to face external challenges of a changing world order impacting both Malaysia’s global trade relations and its society. Only a transformational leader can galvanise Malaysians to overcome these challenges and direct much-needed reforms to help Malaysia transition to high-income status.
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creator: Shyamala Nagaraj
creator: Kiong-hock Lee
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 309
ending page: 329
doi: 10.22452/MJES.vol61no2.6

Political Leadership Matters: The Case of Four Successful East Asian Economies
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description: Out of the thirteen economies that registered sustained rapid economic growth in the post-war period, only six successfully transitioned into high-income economies. Malaysia did not make the cut. The Commission on Growth and Development (CGD) identified credible leadership as a key factor behind the success of the six economies, but it had very little to say about the individual political leaders. This paper fills the gap by allowing the political leaders and their adroitness to speak for them. In particular, we focus on the mindset, acumen and demeanour of the key political leaders in building social capabilities that are crucial to rapid economic growth and development. We find that key political leaders like Okubo Toshimichi of Japan, Park Chung Hee of South Korea, Chiang Kai Shek of Taiwan and Lee Kuan Yew of Singapore rose to the external, existential threats to their peoples and paved the way for them to catch up with the developed economies by displaying and practising the mindset and behaviours of the class of transformational leadership.
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creator: Kiong-hock Lee
creator: Shyamala Nagaraj
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 291
ending page: 307
doi: 10.22452/MJES.vol61no2.5

Malay Entry into Business through Scaling the Heights of Corporate Malaysia from mid-1980s – An Assessment
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description: The aim of this paper is in identifying and analysing, from an economic perspective, the policies, programs and instruments the government used in promoting Malay entry into business, the form of this entry, including of rent-seeking, the extent to which Malays have scaled the heights of Corporate Malaysia as well as of the factors accounting for the success or failure of this agenda in the post-1985 period after the launch of the corporatisation and privatisation era. The discussion on the performance as well as of the key problems and issues encountered from the country’s use of the corporatisation or privatisation route to promote entry, is also combined with a similar discussion on its use of: (a) government linked investment companies (GLICs) in promoting Malay entry into business from an almost non-existent level in 1957, (b) the private finance initiative (PFI) or the build, lease, maintain and transfer (BLMT) model in promoting entry as an owner-manager in the era of corporatisation and institutional fund management, as well as (c) multiple instruments in aggressively promoting entry within an industry or sector with multiple goals.
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creator: R. Thillainathan
creator: Kee-Cheok Cheong
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 265
ending page: 289
doi: 10.22452/MJES.vol61no2.4

The Role of Green Taxation Governance in China: A Review of the Development and Impacts of Environmental Protection Tax
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description: The initiatives from China’s “ecological civilisation construction” to “promoting the modernisation of harmonious coexistence between man and nature”, and then to the dual-carbon goal of “carbon peaking – carbon neutrality”, highlight China’s firm determination to promote green development further. On January 1, 2018, the Environmental Protection Tax Law of the People’s Republic of China was officially implemented as the first new green tax focused on environmental governance in China. This marks the formal entry of China’s environmental protection into the tax era and the establishment of a green tax system with environmental protection tax (EPT) as the core. By a comprehensive review of the development, multi-dimensional effects and tax optimisation paths of China’s EPT, this paper hopes to provide an important reference for government departments to improve the construction of the green tax system, for enterprises to enhance their green governance capabilities, and for scholars to extend the study of the green tax system.
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creator: Chen Zhang
creator: Heyu Xu
creator: Xuli Wei
creator: Kee-Cheok Cheong
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 245
ending page: 263
doi: 10.22452/MJES.vol61no2.3

Does Environmental Factor Influence the Rating of Creditworthiness? A Comparative Analysis of Developed versus Developing Countries
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description: This paper examines the influence of environmental factor in the determination of a country’s creditworthiness given the world’s agenda to contain the rise in global temperature. This paper leverages on two environmental factor proxies, CO2 emissions per capita and renewable energy per capita, to assess whether the environmental factor plays a significant role in determining the sovereign credit ratings (SCRs) issued by three leading credit rating agencies (CRAs), i.e., Moody’s, S&P and Fitch for 49 countries spanning the period of 2000 to 2021. The empirical results show that the environmental factor is being considered by the CRAs. Since the signing of the Paris Agreement in 2015, the environmental factor has turned significant for the determination of the SCRs of developing countries, but not for the developed countries. The creditworthiness of developing countries is subjected to a penalty for CO2 emissions. While the level of renewable energy adoption is higher amongst the developed countries, the evidence does not show that their level of CO2 emissions is lower. This paper recommends the CRAs to explicitly state the environmental factor criteria and update their SCR methodologies to ensure uniformity in application.
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creator: Kok-Tiong Lim
creator: Kim-Leng Goh
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 215
ending page: 243
doi: 10.22452/MJES.vol61no2.2

Nexus between ESG Practice and Firm Performance: Are there any Stylised Facts?
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description: This study examines the relationship between firm performance and ESG (environmental, social and governance) practice for Malaysian public-listed companies. It evaluates whether the relationship varies with firms’ market capitalisation, total liabilities, and free cash flow. Using firm-level data from 72 companies covered in the FTSE4Good Bursa Malaysia (F4GBM) index from 2014 to 2022, our results show the following. First, ESG practice is positively and significantly associated with firm performance. However, the positive impact is conditional on the firm-specific variables. In particular, the positive impact of ESG is significant for firms with high market capitalisation. Second, the positive impact of ESG diminishes as firms accumulate higher liabilities. Third, the positive impact of ESG prevails if firms attain a high level of free cash flow. Our results suggest that firms must increase their market capitalisation, reduce total liabilities, and improve their free cash flow to benefit from ESG practices.
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creator: Tien-Ming Yip
creator: Wee-Yeap Lau
rights: Copyright (c) 2024
date: 2024-09-12
publication date: 2024-09-12
starting page: 199
ending page: 213
doi: 10.22452/MJES.vol61no2.1

Comparing the Causes and Consequences of the Asian and Global Financial Crises on Southeast Asia
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description: The arrival of the global financial crisis (GFC) just a decade after the Asian financial crisis (AFC) may have settled for now the argument about whether the world had learned enough so that economic crises are no longer possible. But it has not settled the argument of whether lessons were learned. This paper deals with this question by focusing on the experience of Southeast Asia, which has borne the full impact of both crises. For this region, these crises emerged through a combination of factors that were as different as they were similar between one crisis and another. The lessons that were learned or not learned in interpreting those factors with respect to each crisis determined each country’s response to that crisis, with politics being an important part of the calculus. Indicators just before the onset of the GFC and of its impact showed that some, but not all, lessons from the AFC were indeed learned. Whatever the lessons learned, however, Southeast Asian stock markets were decimated but which quickly rebounded. Nor would learning lessons guarantee insulation from future crises because the external environment facing Southeast Asia has changed and will continue to change.
subject: Articles
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creator: Kee-Cheok Cheong
creator: Rajah Rasiah
creator: R. Thillainathan
rights: Copyright (c) 2024
date: 2024-06-15
publication date: 2024-06-15
starting page: 177
ending page: 197
doi: 10.22452/MJES.vol61no1.10

The Bank of China: From a Turbulent Past to a Strategic Future – What Does Its Presence in Malaysia Show?
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description: Historically, the Bank of China (BOC) has shouldered responsibilities for the various governments of China. And recently, since Bank of China is in the strategic sector of China, it has assumed the policy responsibilities of the Chinese state such as “Going Out” strategy and Belt and Road Initiative. Most of BOC’s Malaysian business only deal with the home (China) country’s international business rather than the host (Malaysia) country’s local business. Albeit, the BOC has ventured into more local businesses than before, the BOC’s Malaysia’s China-related business is not only far more extensive but also more competitive than its local business activities. Although some efforts have been taken to strengthen its local business and to localise, the internationalisation of the BOC has focused most on the internationalisation of renminbi rather than the internationalisation of the bank/company. Hence, if localisation is viewed as one major method of internationalisation, then the BOC has yet to participate strongly in that activity. Consequently, the focus on home country’s favourable support is likely to make BOC less competitive internationally. Hence, we take the position that the BOC should focus strongly on localisation to gradually join the ranks of localised mainstream foreign banks to become more competitive.
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creator: Ran Li
creator: Kee-Cheok Cheong
rights: Copyright (c) 2024
date: 2024-06-15
publication date: 2024-06-15
starting page: 159
ending page: 175
doi: 10.22452/MJES.vol61no1.9

State-Business Relations and Public-Public Partnerships: China’s State-owned Enterprises in Southeast Asia
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description: China’s hegemonic leader, Xi Jinping, had one core agenda, the Belt & Road Initiative (BRI), which was to be implemented primarily by employing his country’s state-owned enterprises (SOEs). Since 2013, BRI projects have featured extensively in Southeast Asia, a region where countries are led by strongmen leading economies featuring strong state intervention. As the presence of China’s SOEs in Southeast Asia grew, this led to major changes in the nature of state-business relations (SBRs). In this context, where structural power lies with the state, or in this case, the two states of China and the host nation, a fundamental query emerges: who governs in these SBRs? This article analyses this question with a focus on three core themes – China’s mounting presence in Southeast Asia through the BRI, the growing role of SOEs in these economies, and evolving SBRs.
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creator: Edmund Terence Gomez
rights: Copyright (c) 2024
date: 2024-06-15
publication date: 2024-06-15
starting page: 141
ending page: 157
doi: 10.22452/MJES.vol61no1.8