The Relationship between Government Revenue and Expenditure in Malaysia

Authors

  • Wong Hock Tsen School of Business and Economics Universiti Malaysia Sabah
  • Lim Kian Ping Labuan School of International Business and Finance Universiti Malaysia Sabah

Keywords:

Budget deficit, Intertemporal budget constraint, Government revenue and expenditure, Cointegration, Malaysia

Abstract

The study examines the relationship between government revenue and expenditure in Malaysia. The results of the Dickey and Fuller (1979) and Phillips and Perron (1988) unit root test statistics show that government revenue and expenditure are integrated of order one. The results of the Johansen (1988) and Gregory and Hansen (1996) cointegration methods show that government revenue and expenditure are cointegrated. Thus, there is a longrun relationship between the government revenue and expenditure. The intertemporal budget constraint is not violated and the budget deficit of the Malaysian government is generally said to be sustainable. The results of the Granger-causality test generally show that the government revenue leads to government expenditure in Malaysia.

 

Additional Files

Published

01-12-2005

How to Cite

Tsen, W. H., & Ping, L. K. (2005). The Relationship between Government Revenue and Expenditure in Malaysia. International Journal of Management Studies, 12(2), 53–72. Retrieved from https://e-journal.uum.edu.my/index.php/ijms/article/view/9210

Issue

Vol. 12 No. 2 (2005): International Journal of Management Studies (IJMS) Vol. 12, No. 2 December 2005

Section

Articles