The Relationship between Government Revenue and Expenditure in Malaysia

Authors

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

DOI:

https://doi.org/10.32890/ijms2005.12.2.4

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.

 

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Published

01-12-2005

Issue

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

Section

Articles

Research impact

Harvested 2026-09-24
12 citations, from Semantic Scholar — the highest of the sources checked

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Identifiers DOI 10.32890/ijms2005.12.2.4 OpenAlex W7033634743 Semantic Scholar CorpusID 55296170

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