The Relationship Between Corn Imports and Domestic Consumption and Economic Growth in Malaysia
https://doi.org/10.56225/jmsc.v4i2.468
Keywords:
Economic growth, Domestic use of corn, Agricultural corn import, ARDL test and Johansen cointegration, Granger causalityAbstract
The corn industry has increasingly emerged as a new source of wealth and income for Malaysia. However, the country’s dependence on corn imports remains high due to insufficient local production to meet domestic demand. Therefore, this study was conducted to assess the long-term and short-term effects of corn imports and domestic consumption on Malaysia’s economic growth. This empirical study employs secondary time-series data for the period 1986–2019 obtained from IndexMundi and the World Bank. The analysis was carried out using the Autoregressive Distributed Lag (ARDL) approach, the Johansen Cointegration test, the Error Correction Model (ECM), and the Granger Causality Test in EVIEWS-10. The findings reveal that both corn imports and domestic consumption have long-run and short-run relationships with Malaysia’s economic growth. The ARDL model and cointegration tests confirm the existence of integrated relationships among the variables, while the ECM results indicate a significant adjustment towards long-run equilibrium. The Granger Causality Test further demonstrates one-way causality from domestic consumption to GDP, from imports to GDP, and from domestic consumption to imports. This indicates that changes in domestic consumption and corn imports have direct implications for the nation’s economic growth. In conclusion, this study contributes to a deeper understanding of the strategic role of the corn industry in Malaysia’s economic development. Additionally, the findings can serve as a reference for policymakers and relevant agencies in formulating strategies to strengthen the corn supply chain, enhance domestic consumption, and optimize import activities in support of national economic growth.
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