• Malaysian Bureau of Labour Statistics
Inventory of completed work

Research and Development

Muhammad Shafiq Harun; Nur Layali Mohd Ali Khan; Nurfarahin Harun

Box Article 1: Exploring The Relationship Between Investment Of Fixed Assets And The Labour Market: An Experimental Study

Introduction

  • Malaysia’s economic structure had undergone various changes throughout the years since it gained independence in 1957 to date. The country has successfully diversified its economy from high reliance towards the commodity-based sectors such as Agriculture and Mining & Quarrying in the early post-independent era; to a subsequent expansion of the Manufacturing sector in the 1990s; and is later dominated by Services sector while the Manufacturing sector continued to support the growth. The changes in the structure of Malaysia’s economy is reflected in the changes in the composition of the country’s GDP. The Agriculture sector’s contribution to the GDP has declined from 20.0 per cent in 1987 to 7.2 per cent in 2020. In the meantime, the Manufacturing sectors has rapidly expanded from 19.9 per cent 30.7 per cent; while Services increased from 45.3 per cent to 51.2 per cent over the same period. In line with the changes in the economic structures, the pattern of sectoral employment can also be observed with the rising proportions of employment in the Manufacturing and Services sector. In contrast, the share of employment in the Agriculture sector declined from 1987 onwards.
  • Based on literatures, a general understanding can be established that investment and economic growth are closely interconnected. Tang et al. (2008), Ghazali, A. (2010) and Meyer et al. (2019) have confirmed a strong relationship between domestic investment and economic growth of which one indicator can influence the performance of the others. This was achieved as the respective study each measured gross fixed capital formation (GFCF) to assess the economic performance in the respective county namely China (Tang et al., 2008), Pakistan (Ghazali, A. 2010) and South Africa (Meyer et al., 2019).
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