Palm oil industry in Malaysia: factors that affect production of palm oil / Kartika Adeni

The objective of this study is to identify the production factors that affect the Malaysian palm oil industry in terms of palm oil products and to determine most significant factors that contribute to palm oil production. The model is estimated by taking into account total oil palm area, domestic consumption and exports over the period of study between 1975 and 2007. Ordinary Least Square (OLS) which consists of simple and multiple regression analysis to estimate the model. In the multiple regression analysis, the log-log model which is the dependent variable as well as all explanatory variables is transformed to logarithms. Since the relationship among the log variables is linear some researchers call this a log-linear model. In a simple regression analysis, total planted area, domestic consumption and total export of palm oils have significant impact on the total productions of palm oil products. Whereas in the multiple regressions, the total planted area of palm oils do not significantly affect the total production of palm oil.