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Title:	Imported inputs and free trade agreements: evidence from Malaysian manufacturing industries
Authors:	Choong Pai Wei (P61214)
Supervisor:	Noor Aini Khalifah, Assoc. Prof. Dr.
Keywords:	Free trade -- Malaysia Globalization -- Economic aspects -- Malaysia Malaysia -- Economic policy Universiti Kebangsaan Malaysia -- Dissertations Dissertations, Academic -- Malaysia
Issue Date:	16-Jun-2019
Description:	The rapid expansion of Malaysian non-resource-based manufactured exports is closely related to its participation in international production sharing, which is mainly attributable to the advancement in information and communication technology, reduction in trade and transportation costs as well as the proliferation of free trade agreements (FTA) among member countries. The involvement in international production sharing inflates the value of manufactured exports due to the embodiment of foreign inputs in its export values which fail to indicate exporting country��s international competitiveness. The general objective of this dissertation is to study the impact of production sharing on the bilateral manufactured exports between Malaysia and its world trading partners over the year of 1990 to 2016. This study aims to look into two specific objectives: firstly, to examine the impact of intermediate imports on the bilateral production sharing exports; and secondly, to examine the impact of free trade agreements on the Malaysian manufactured exports as its tariffs are already at the very low level. OECD STAN database is suitable for this study as it breaks down country-pair��s bilateral trade flows by country and industry level and by end-use category. The first objective of this study embeds foreign inputs in trade-based gravity model as essential inputs for modular production network. The second objective includes FTA-and-intermediate imports interaction term to examine the impact of FTA on production sharing exports. Both studies adopt dynamic panel system generalized method of moment estimator to account for heteroscedasticity, autocorrelation and endogenous issues. The findings of the first objective show evidence of non-resource-based industry��s participation in production sharing which is supported by positive and significant impact of intermediate imports on the bilateral exports; the second objective reveals the importance of ASEAN Free Trade Area (AFTA) and bilateral trade agreements (BTA) in expanding the Malaysian production sharing exports. Malaysia��s participation in international production networks is primarily led by intermediate imports, the greater and more similar economic sizes of trading countries, the declining trade and transportation costs as well as growing trade liberalization among AFTA member countries. This study shows the distinguished characteristics of Malaysian resource-based and non-resource-based exports; non-resource-based industry participates in the assembly stage of a production network mainly driven by cheap labor and transportation costs, while resource-based industry relies primarily on the availability of natural resources for exports, which is consistent with the classical trade theory of Heckscher-Ohlin model. To attract participation in production sharing network, the Malaysian government is encouraged to form regional trade relationships with trading countries and to enhance infrastructure network and efficiency service sector. To shift towards higher value-added activities and increase the use of domestic resources, the Malaysian government is encouraged to focus on human capital and skills development, building productive capacity of domestic firms as well as fostering industrial linkage between multinational enterprises and domestic firms.,Ph.D.
Pages:	97
Call Number:	HF2340.6.C494 2019 tesis
Publisher:	UKM, Bangi
Appears in Collections:	Faculty of Economy and Management / Fakulti Ekonomi dan Pengurusan

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