Role of Construction and Manufacturing Sectors in Economic Development of Malaysia.

Looi, Yi Wei (2018) Role of Construction and Manufacturing Sectors in Economic Development of Malaysia. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

The construction and manufacturing sectors are an invaluable part of any economy which stimulates growth in the overall economy through its relationships. Many researchers found that the construction and manufacturing sectors has always been closely related to the national economy. This paper investigate the causal relationship between constructions, manufacturing and economic growth by using data from Department of Statistics and World Bank over the period of 1980 to 2015 in Malaysia, uses Vector Error Correction Model (VECM), Johansen and Juselius Cointegration test, Granger Causality test and unit root tests. The relationship between economic growth, construction and manufacturing was tested by employing Granger Causality tests. Granger Causality test result provided the evidence of unidirectional Granger Causality between constructions and manufacturing in Malaysia, while for the long run, the impact was positive between construction, manufacturing industries and real gross domestic product.