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Hafizah Abdul Rahim
The impact of exchange rate on Malaysia wood export
Export-Led Growth theory: Malaysian timber industry
2012-10
,
Noor Aini Zakaria
,
Hafizah Abdul Rahim
,
Noor Hazmira Merous
Malaysia has been a major wood producer and exporter since 1970s. The
Malaysian wood industry has grown from being a producer and exporter of
logs to primary and higher value-added products such as sawntimber, plywood,
veneer, and mouldings. The export contribution of wood also plays a significant
development for the Malaysian export sector. For Malaysian wood export,
being one of the sector that influenced by the exchange rate volatility, the study
on the impact of exchange rate on export is considered important. This study
uses Granger causality approach to analyze the relationship between exchange
rate and wood export. Chow test is used to examine the structural change of
exchange rate regime; pegged exchange rate regime and managed float
exchange rate. The quarterly data of exchange rate and wood export from
1997-2008 were employed for this study. The result indicated that there is a
structural break in the third quarter of 2005 to the fourth quarter of 2008 which
real exchange rate is significant and positively correlated to timber export
under managed floating exchange rate regime. Thus, understanding the
relationship between exchange rate and timber export performance is
important for Malaysia to further develop the direction of the industry.
2013-06
,
Noor Aini Zakaria
,
Hazmira Merous
,
Hafizah Abdul Rahim
,
Adibah Hussin
Malaysia is one of the world’s largest exporters of tropical timber and timber
products with export destinations to 160 countries. In 2008, the timber industry
was the fifth largest contributor with contribution of 3.3 percent to total export
earnings of Malaysia. Among commodities, timber industry shared about 20.3
percent of the export earnings. The major exports of primary products are saw
logs, sawn timber, fibre board and plywood. Secondary processed wood
products are furniture, builders’ joinery and carpentry together with
mouldings. Given the contribution of Malaysian timber sector to Malaysian
economy, this study sets to assess the experience of timber industry in Malaysia
to provide support for export led growth (ELG) hypothesis. This study employs
yearly data of real GDP and real export of timber products for the period
1979-2008 using Granger Causality approach. Cointegration test using
Johansen approach evidenced the existence of long-run relationship between
export and GDP of timber products. Furthermore, Granger causality proves
that export led growth for Malaysian timber industry.