The export-led growth in Malaysia: Does economic policy uncertainty and geopolitical risks matter?


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Adedoyin F. F., Afolabi J. O., Yalçiner K., Bekun F. V.

Journal of Public Affairs, vol.22, no.1, 2022 (ESCI) identifier

  • Publication Type: Article / Article
  • Volume: 22 Issue: 1
  • Publication Date: 2022
  • Doi Number: 10.1002/pa.2361
  • Journal Name: Journal of Public Affairs
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus, Academic Search Premier, IBZ Online, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier, Communication & Mass Media Index, Communication Abstracts, PAIS International, Political Science Complete, Public Affairs Index, vLex
  • Istanbul Gelisim University Affiliated: Yes

Abstract

© 2020 John Wiley & Sons LtdIn spite of the fact that the connection between exports of goods and services and economic growth has for quite some time been talked about, the examination of the relationship in light of recent global events such as economic policy uncertainty and geopolitical risks is yet to be given the required attention. Various empirical researches have demonstrated that the export-led growth hypothesis (ELGH) holds for singular nations in terms of overall economic development. However, this study re-examines the ELGH with a special focus on the absolute and mediating impact of economic policy uncertainties and geopolitical risks. With data spanning the period 1980 to 2018. Empirical results from the Autoregressive distributed lag model and the error correction models suggest that for Malaysia, Economic Policy Uncertainty (EPU) exerts a negative impact on growth evens as its moderating impact on exports leads to negative economic growth. On the other hand, the impact of Geopolitical risk on growth is both negative and positive but insignificant in the short-run and long-run respectively. The study suggests the government of Malaysia works to ensure macroeconomic and political stability to achieve export-driven growth in the country.