توسعه مالی، سرمایه گذاری خارجی و رشد اقتصادی در مالزی

By making use of the bank-based theory of financial development, this paper develops a simultaneous equations model that allows one to empirically examine the interrelationship among economic growth, the stock of foreign investment and the stock of domestic capital in Malaysia. The empirical model is estimated by means of the Generalised Method of Moments. The empirical analysis, based on annual data for the period 1970–2007, reveals that the level of financial development has contributed to the growth of the domestic capital stock in Malaysia but its impact on economic growth is statistically insignificant. An increase in the stock of foreign investment in Malaysia has contributed to an increase in the stock of domestic capital and economic growth but the stock of foreign investment is affected significantly only by the level of openness of the economy and its real exchange rate.

The endogenous growth literature [for example, the work of Romer (1986) and Lucas, 1988 and Lucas, 1993] suggests that the level of financial development can affect long-run economic growth. It has been argued that financial development enhances economic growth directly as well as indirectly through its impact on domestic capital accumulation and total factor productivity. Financial development contributes to increased mobilisation of savings as well as a reduction in information asymmetries, which leads to better allocation of resources. Financial development also involves improved monitoring of managers and a higher level of corporate control which facilitates risk reduction (Roubini and Sala-i-Martin, 1992 and King and Levine, 1993). Financial sector reforms in developing countries have contributed to increased financial globalisation. It has been suggested that countries that are relatively more financially developed are better able to avoid or withstand currency crises (Federici and Carioli, 2009).2 Financial development can contribute to economic growth in a number of ways. For example, financial development in the form of increased confidence in the financial system encourages relatively less well-off households to save more, which increases the supply of funds that could be made available to large investors. In addition, financial development allows a relatively more efficient use of financial capital.3 A large number of existing studies have utilised a single equation model where (i) economic growth depends on the level of financial development and other control variables (for example Cooray, 2009) or (ii) financial development is a function of economic development and other control variables (for example Ang and McKibbin, 2007). Control variables are used to lessen the effect of omitted variable bias (see Lütkepohl, 1982). The Vector Error Correction (VECM) and the Unrestricted Vector Autogresssion (UVAR) approaches are useful when the sample size is large which, in the case of economic growth studies, usually requires the use of quarterly data. However, in the case of most developing countries, quarterly data on all the relevant variables are not available and therefore VECM and UVAR approaches have often been used with a restricted number of variables in the model, which can cast doubt on the validity of the findings. In addition, a large number of empirical studies have considered the relationship between economic growth and the stock of foreign investment, while others have considered the relationship between the stock of domestic capital and the stock of foreign investment.4 In other words, in most cases, one has to look at separate studies to find out whether or not there is a significant relationship between the level of financial development and economic growth and whether or not there is a significant link between the stock of domestic capital and the stock of foreign investment in a country. This paper focuses on Malaysia, a developing country that has experienced significant economic growth over the past few decades. The existing literature is mostly based on two approaches: single equation structural modelling (such as Liu and Hsu, 2006) and multiple equations VECM modelling (such as Ang and McKibbin, 2007). This paper utilises an intermediate approach: simultaneous equations based structural modelling. The model allows one to examine the interrelationship among three key variables: economic growth, the stock of foreign investment and the stock of domestic capital. Specifically, this paper utilises a three equation structural model that allows one to simultaneously examine the links between (a) the level of financial development and economic growth, (b) the stock of domestic capital and the level of financial development and (c) the stock of foreign investment and the stock of domestic capital.5 The rest of this paper is organized as follows. Section 2 contains a brief literature review that focuses on the link between the level of financial development and economic growth. This section also contains an overview of the Malaysian financial sector. Section 3 contains the model and a discussion of the empirical strategy. Section 4 contains the empirical analysis, while Section 5 contains some concluding remarks.

A number of studies have separately considered the link between economic growth and the level of financial development and the link between the stock of domestic capital and the stock of foreign investment in host countries. A higher level of financial development can, among other things, help to dampen the effect of economic crises faced by developing countries. While focusing on Malaysia, unlike most existing studies, this paper utilises a simultaneous equations model that is relatively closely linked to the bank based theory of financial development. The model explicitly takes into account the determinants of total factor productivity. The empirical model utilised in this paper can be used to examine the relationship between, for example, (i) the level of financial development and economic growth and (ii) the stock of domestic capital and the stock of foreign investment. The empirical analysis presented in this paper is based on annual data for the period of 1970–2007. The empirical model is estimated by means of the Generalised Method of Moments technique. The estimated model reveals that the level of financial development in Malaysia significantly affects its stock of domestic capital which contributes to economic growth. However, the direct effect of the level of financial development on economic growth in Malaysia is statistically insignificant. The domestic stock of capital increases in response to an increase in the stock of foreign investment but the stock of foreign investment is significantly affected only by the degree of openness and the real exchange rate. An increase in the stock of human capital contributes to economic growth but growth in government consumption hinders economic growth and its effect on the stock of domestic capital is also negative. Based on the results presented in this paper, it can be argued that there is a need for further financial sector reforms in Malaysia. Malaysia would benefit from a decrease in government consumption. Alternatively, steps need to be taken to improve the efficiency of government consumption spending. In a recent study Cooray (2011) has suggested that, Government can play an important role in financial sector development. Human capital growth is making a sizeable contribution to economic growth in Malaysia and hence polices that would boost the stock of human capital are highly desirable.