Citation
Elameer, Ahmed Elyas
(1997)
Sources of Industrial Growth Using Factor Decomposition Approach: Malaysian Experiences, 1978-87.
Masters thesis, Universiti Putra Malaysia.
Abstract
The main objective of the study is to examine sources of industrial output
growth of the Malaysian economy, which has undergone changes in its trade policy
from import substitution to export orientation strategies. To fulfill this objective,
sources of industrial growth are analysed by factor decomposition approach (i.e.
demand side analysis) This approach decomposed output growth of each industry
into its four sources namely, export expansion, import substitution, intermediate
demand expansion and domestic demand expansion.
Input-output tables for the years 1978, 1983 and 1987 which were published
by the Department of Statistics were used in this study. The overall period between
1978 to 1987 has been divided into two sub-periods, that is 1978-1983 and 1983-987. The 1983 and 1987 tables were deflated to their 1978 constant prices using
both sectoral producer price and sectoral import price indices.
The results of the study indicate that the domestic demand expansion has
been the dominant source of growth of the overall Malaysian economy in 1978-83.
The study also shows that the industrial growth was due to the export expansion
during 1983-87 and the overall period. The manufacturing sector appears to play a
crucial role in the country's growth process. Its contribution to the overall economic
growth has steadily increased. Most important among the manufacturing sub-sectors
is the electrical machinery industry.
This study concludes that while it is important to continue pursuing export oriented
strategy to achieve growth objectives, it has to balance it out with an
appropriate policy to reduce import of intermediate and capital goods.
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