Effects of Sector-Specific Factors, Economic Factors, and Monetary Policy Factors on Business Dynamic of Financial Services Industry : Evidence from Malaysia

Yee, Ern Hui (2020) Effects of Sector-Specific Factors, Economic Factors, and Monetary Policy Factors on Business Dynamic of Financial Services Industry : Evidence from Malaysia. Masters thesis, Tunku Abdul Rahman University College.

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Abstract

This paper examines the effects of sector-specific factors, economic factors, and monetary policy factors on business dynamic of Malaysian financial services industry. The study employes whole public listed financial services industry in Malaysia consists of 10 public listed banks, 9 insurance institutions and 14 other financial institutions. In considering the crisis factor, four models have been conducted for each sectors: a) First and second models make distinctive comparison on the effect of financial crisis dummy variable 2008-09, b) Third and fourth models investigate the dataset separately from year 2000 to 2007, and year 2010 to 2019 respectively, particularly, pre-crisis period, and post-crisis period. This study found that there exists significant relationship between sector-specific factors, economic factors and monetary policy factors and business dynamic across banks, insurance and other financial institutions industry. Nevertheless, by factoring in crisis factors, the impact seems to be mere significant across three industries which indicates income activities will lead to bank and non-banks’ activities less fluctuate to systematic crisis.