The Nexus between Inflation, Trade, and FDI with Economic Sustainability in Malaysia / Faridah Pardi, Mohd Azlan Abd Majid and Sutina Junos

Pardi, Faridah and Abd Majid, Mohd Azlan and Junos, Sutina (2021) The Nexus between Inflation, Trade, and FDI with Economic Sustainability in Malaysia / Faridah Pardi, Mohd Azlan Abd Majid and Sutina Junos. Journal of Academia, 9. pp. 74-83. ISSN 2289-6368

Abstract

The Adjusted Net Saving (ANS) rate indicator was introduced by the World Bank in the early 1990s to measure the sustainable development path of a country. Since then, the indicator has been widely recognized for its comprehensive economic sustainability measurement. This paper explored the nexus between inflation rate, international trade and foreign direct investment (FDI) with the economic sustainability path in Malaysia from 1987 to 2018. We employed the autoregressive distributed lag (ARDL) model based on the Bounds test approach to identify the connection among the listed variables. The result findings showed that in the long run, trade and FDI have a significant positive impact on the ANS rate while the inflation rate, however, presented otherwise. Following the cointegrating short-run model, the error correction term indicates a highly significant negative form which confirms the correct speed of adjustment towards the equilibrium. As the Coronavirus pandemic is currently affecting the global economy, this study further recommends that investment and international trade policies must be meticulously be reformulated to ensure sustained development in an emerging economy like Malaysia.

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Item Type: Article
Creators:
Creators
Email / ID Num.
Pardi, Faridah
UNSPECIFIED
Abd Majid, Mohd Azlan
UNSPECIFIED
Junos, Sutina
UNSPECIFIED
Subjects: H Social Sciences > HB Economic Theory. Demography > Business cycles. Economic fluctuations. Economic indicators > Finance and cycles. Financial crises. Convergence (Economics)
H Social Sciences > HC Economic History and Conditions > Income. Income distribution. National income. Including gross national product, gross domestic product, and gross state product
Divisions: Universiti Teknologi MARA, Negeri Sembilan
Journal or Publication Title: Journal of Academia
UiTM Journal Collections: UiTM Journal > Journal of Academia (JoA)
ISSN: 2289-6368
Volume: 9
Page Range: pp. 74-83
Keywords: Nexus, Inflation, Trade, FDI, Economic Sustainability, Malaysia
Date: 2021
URI: https://ir.uitm.edu.my/id/eprint/53831
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