Citation

Mohd Aznan, Muhammad Syawal and Goh, Han Hwa and Koong, Seow Shin and Tan, Siow Hooi (2022) Nonlinear threshold approach for asymmetric effects of government size on economic growth in an emerging Asian economy: the Malaysian experience. Heliyon, 8 (9). e10524. ISSN 2405-8440

Text 1-s2.0-S2405844022018126-main.pdf - Published Version Restricted to Repository staff only Download (520kB)

Abstract

This paper discovers the asymmetric relation between government size and economic growth in Malaysia, an emerging Asian economy, by utilising a dynamic threshold nonlinear approach. The study finds empiric evidence that the threshold effect linking government size to economic growth in Malaysia exists when two different proxies of government size are set as the threshold variable. On closer inspection, it is found that an inverted U-shaped Armey curve is present when allowing for endogenous government size threshold proxied by government operating/real GDP. However, a U-shaped curve of nonlinear relationship exists instead when the government investment/real GDP serves as the threshold variable. In general, this paper gives policymakers a real insight into the optimal government size in Malaysia especially when designing an effectual fiscal policy to advance sustainable economic growth to materialise its Shared Prosperity Vision by the year 2030.

Item Type:	Article
Uncontrolled Keywords:	Threshold, Asymmetry, Government size, Economic growth, Emerging Asian economy, Malaysia
Subjects:	H Social Sciences > HC Economic History and Conditions > HC79 Special Topics. Including air pollution, automation, consumer demand, famines, flow of funds, etc.
Divisions:	Faculty of Management (FOM)
Depositing User:	Ms Nurul Iqtiani Ahmad
Date Deposited:	07 Oct 2022 02:31
Last Modified:	07 Oct 2022 02:31
URII:	http://shdl.mmu.edu.my/id/eprint/10503

Downloads

Edit (login required)