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.
