THE EFFECT OF OIL PRICE CHANGES ON PRODUCTIVITY LEVEL IN MANUFACTURING SECTOR IN MALAYSIA

ABSTRACT

According to the previous studies, an increase in oil prices does influence the level of economic activities. This project attempts to identify the effect of changes in oil price on productivity performance in Malaysian manufacturing sectors. Two variables are used in this paper are Crude Oil Prices (COP) and Industrial Production Index (IPI). The results from the study show a positive relationship between changes of oil price and manufacturing productivity performance. Overall, this study only captures dynamic or short-term relationship between COP and IPI.  

EXAMINING THE EFFECT OF INFLATION ON PRODUCTION VOLUME IN CRUDE OIL INDUSTRY

Abstract

This study is pursued with the objective to examine the long-run relationship between inflation and production volume in the crude oil industry.  The study employs Engle-Granger Co-integration tests and Error-Correction Modeling on the monthly data series extracted from January 1998 through December 2005.  The empirical results show there is a positive relationship between inflation (as proxied by consumer price index) and crude oil production volume (as proxied by oil production index) but this relationship is found to be statistically insignificant.  The results from the Co-integration analysis reveal the presence of short-term and long-term relationship between inflation and crude oil production. The test results from Granger Causality Test within Error Correction Model shows a bi-directional relationship between the two tested variable.  This implies that the model can be postulated to be either inflation is a function of oil production volume or vice versa.  Nevertheless, this study requires further analysis in the future as the findings appear to be slightly controversial.  

THE EFFECT OF CURRENCY RISK ON MANUFACTURING INDUSTRIES PERFORMANCES IN MALAYSIA

ABSTRACT 

This empirical study implements time series techniques of cointegration and vector auto regression (VAR) to observe the effect of currency risk on manufacturing industries performances in Malaysia. The currency risk proxied by exchange rate (RM/USD) and manufacturing industries performances is proxied by Industrial Product Index (IPI). This study found a positive relationship between exchange rate and industrial product index in Malaysia. Our findings suggest no long run relation between IPI (Industrial Product Index) and exchange rate (RM/USD). However, there is substantial short run dynamic interaction between them. We note the significant responses of the Industrial Product Index to exchange rate shocks regardless of the sample periods. From the results, we contend that exchange rate plays an important role influencing the level of production in manufacturing industries in Malaysia.

Keywords: Currency Risk, Exchange Rate, Manufacturing Industries Performances and Industrial Product Index.

SOCIO-ECONOMIC FACTORS AND JUVENILE DELINQUENCY IN MALAYSIA

ABSTRACT

Juvenile delinquency, a long-standing problem which has existed for the past few decades, has adverse impact on social, capital and human resource development.  Therefore, this study explores this issue in detail by identifying the factors that lead to immoral acts of felony among teenagers although there are at least four laws to curb its growth. The study serves three main objectives. First, the study is carried out to determine the level of delinquency by looking at the level of education, socio-economy and family relationship. Second, the study attempts to look at the perception of those who are delinquentst. The final objective is to explore the factors that contribute to juvenile delinquency. This study is based on a questionnaire survey which includes a structured close-ended questionnaire with a nominal scale of 1 to 7, which translates into “Strongly agree” to “Strongly disagree”.  It comprises two parts, whereby Part 1 is a Demographic Profile while Part 2 consists of three categories encompassing Education,Socio-Economy and Family Relationship. Results indicate that socio-economic matters, family relationship and level of education are significant factors in explaining juvenile delinquency. At the same time, the findings also indicate that socio-economic reason and family relationship are the main factors that contribute to crimes involving juveniles in the country.  Implication from this study points to the need for continuous prevention actions and commitment from many parties in order to curb the problem.  It requires full commitment of the government, NGOs, enforcement officers and involvement of the society as a whole, apart from the police department.  Without serious monitoring and collective action, juvenile delinquency will continue to be a problem that is detrimental to the development of society as well as human capital.

COINTEGRATION ANALYSIS OF ISLAMIC MONEY MARKET RATE

Abstract

Banks earn interest income by borrowing at low cost of interest from consumer/savers and lending at higher cost of interest to companies that need resources for financing and investment. Thus, providing liquidity and combining lending and liquidity provision as a commitment mechanism become the main issue. Banks borrow from and lend to each other via interbank lines of credit and on-lend to deficit units in large amounts at interest rates that depend upon the maturity of the loan and the credit worthiness of the borrower. In Malaysia, such market operates based on Kuala Lumpur interbank offered interest rates (Klibor). In 1994 an Islamic interbank money market system (IIM) was introduced to meet the liquidity needs for the Islamic financial institutions. This study is to investigate the long-run relationship between overnight Klibor and overnight IIM rate. The results indicate no long-run cointegration and both markets run independently.

Keywords:  intermediation; liquidity; interest rates and Islamic interbank