Macroeconomic Variables Affecting the Fish Trade Balance in Malaysia
DOI:
https://doi.org/10.32890/jes2020.2.2.5Kata kunci:
fish, macroeconomic variables, trade balance, trade openness, VECMAbstrak
The world demand for fish has been increasing. Malaysia has a high fish trade with other countries. However, Malaysia, which has been one of the main fish producers given its long coastlines, still experiences a fish trade deficit. The present study aims to explore the effect of macroeconomic factors on the Malaysian fish trade balance by implementing the Vector Error Correction Model (VECM) on the time series data from 1976 to 2016. The findings reveal that foreign income is positively correlated with the trade balance in both short-run and long-run. Nevertheless, trade openness, depreciation of exchange rate, and money supply show a negative effect on the trade balance for the long-run mainly. The incidents are mainly due to fish import dependence and a lack of capacity of exporting fish. To strengthen the trade balance, reducing fisheries products export duties and restricting imported fisheries products are highly recommended.
Received 24 March 20. Revised 6 April 20. Accepted 19 April 20.
Rujukan
Ahad, M. (2017). Impact of financial development on trade balance: An ARDL cointegration and causality approach for Pakistan. Global Business Review, 18(5), 1199–1214.
Alhanom, E. (2016). Determinants of trade balance in Jordan. NG-Journal of Social Development, 5(2), 24–34.
Asumadu-Sarkodie, S., & Owusu, P. A. (2016). The relationship between carbon dioxide and agriculture in Ghana: A comparison of VECM and ARDL model. Environmental Science and Pollution Research, 23(11), 10968–10982.
Bostock, T., Greenhalgh, P., & Kleih, U. (2004). Policy research - implications of liberalization of fish trade for developing countries: Synthesis report. In Chatham, UK: Natural Resources Institute.
DOFM. (2017). Malaysian Fishing Industry Scenario. Department of Fisheries Malaysia. Retrieved from https://www.dof.gov.my/index.php/pages/view/42
Dornbusch, R. (1976). Exchange rate expectations and monetary policy. Journal of International Economics, 6(3), 231–244.
Duasa, J. (2007). Determinants of Malaysian trade balance: An ARDL bound testing approach. Global Economic Review, 36(1), 89–102.
Engle, R. F., & Granger, C. W. J. (1987). Co-integration and error correction : Representation, estimation, and testing. Econometrica, 55(2), 251–276.
FAO. (2018a). Positive outlook for global seafood as demand surges for multiple species in markets across the world | GLOBEFISH. Food and Agriculture Organization. Retrieved from http://www.fao.org/in-action/globefish/market-reports/resource-detail/en/c/1109513/
FAO. (2018b). The State of World Fisheries and Aquaculture. Retrieved from www.fao.org/publications
FishStat. (2019). FAO Fisheries and Aquaculture - Statistics. Retrieved from http://www.fao.org/fishery/statistics/en
FRED. (2020). Malaysia / U.S. Foreign Exchange Rate. Federal Reserve Economic Data. Retrieved from https://fred.stlouisfed.org/series/AEXMAUS
Guechari, Y. (2012). An empirical study on the effects of real effective exchange rate on Algeria’s trade balance. International Journal of Financial Research, 3(4), 102–115.
Harberger, A. C. (1950). Currency depreciation, income, and the balance of trade. Journal of Political Economy, 58(1), 47–60.
Hassan, M. S., Wajid, A., & Kalim, R. (2017). Factors affecting trade deficit in Pakistan, India and Bangladesh. Economia Politica, 34(2), 283–304.
ITC. (2019). Trade Map - List of importers for the selected product (Fish and crustaceans, molluscs and other aquatic invertebrates). International Trade Centre. Retrieved from https://www.trademap.org/Country_SelProduct_TS.aspx?nvpm=1%7C%7C%7C%7C%7C 03%7C%7C%7C2%7C1%7C1%7C1%7C2%7C1%7C2%7C1%7C1
Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2–3), 231–254.
Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration - With applications to the demand for money. Oxford Bulletin of Economics and Statistics, 52(2), 169–210.
Kasa, K. (1992). Common stochastic trends in international stock markets. Journal of Monetary Economics, 29(1), 95–124. Journal of Economics and Sustainability
Khan, M. A., Jaffri, A. A., Abbas, F., & Haider, A. (2017). Does trade liberalization improve trade balance in Pakistan? South Asia Economic Journal, 18(2), 158–183.
Knoema. (2019). Malaysia M1, 1929-2018. Retrieved from https://knoema.com//atlas/Malaysia/topics/Economy/Financial-Sector-Monetary-holdings-liabilities/M1
Koen, V., Asada, H., Nixon, S., Rahuman, M. R. H., & Arif, A. Z. M. (2017). Malaysia’s economic success story and challenges. In Documents de Travail du Département des Affaires Économiques (No. 1369).
Koyuncu, F. T. (2014). Causality network between budget deficit, money supply and inflation: An application to Turkey. International Journal of Business and Social Science, 5(10), 225–235.
Maddala, G. S. (2001). Introduction to econometrics (3rd, illustrated ed.). John Wiley.
Okodua, H., & Olayiwola, W. K. (2013). Migrant workers’ remittances and external trade balance in Sub-Sahara African countries. International Journal of Economics and Finance, 5(3), 134–142.
Ousseini, A. M., Hu, X., & Aboubacar, B. (2017). WAEMU trade and current account balance deficit analysis: A panel VAR approach. Theoretical Economics Letters, 7, 834–861.
Phan, T. H., & Jeong, J. Y. (2015). Vietnam trade balance and exchange rate: Evidence from panel data analysis. Journal of Applied Economics & Business Research, 5(4), 220–232.
Rose, A. K., & Yellen, J. L. (1989). Is there a J-curve? Journal of Monetary Economics, 24(1), 53–68.
Sharif, M. N., & Ali, A. Y. S. (2016). Determinants of trade balance in Somalia: Regression analysis using time series data. Journal of Economics and Sustainable Development, 7(12), 62–71.
Smith, A. (1776). An Inquiry Into the Nature and Causes of the Wealth of Nations (Cannan ed.), vol. 1 (E. Cannan, Ed.). Retrieved from https://oll.libertyfund.org/titles/237
Straits Times. (2018, December 17). Malaysian government to prohibit export of 4 species of fish, shrimp from Jan 1 to Feb 28. Retrieved from https://www.straitstimes.com/asia/se-asia/malaysian-government-to-prohibit-export-of-4-species-of-fish-shrimp-from-jan-1-to-feb
Tufail, M. K., Anwar, S., Raza, S. H., & Abbas, K. (2014). Effect of budget deficit on trade deficit in Pakistan (A time series analysis). Journal of Finance and Economics, 2(5), 145–148.
World Bank. (2019). Trade (% of GDP) | Data. Retrieved from https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS?locations=MY
World Bank. (2020). GDP per capita (constant 2010 US$) | Data. Retrieved from https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?locations=MY-US
