Open AccessMACROECONOMIC VARIABLES AFFECTING THE FISH TRADE BALANCE IN MALAYSIA
Author(s) -
Bee Hui Soh,
Ghee-Thean Lim
Publication year - 2020
Publication title -
journal of economics and sustainability
Language(s) - English
Resource type - Journals
ISSN - 2637-1294
DOI - 10.32890/jes2020.2.2.5
Subject(s) - balance of trade , depreciation (economics) , openness to experience , error correction model , fish <actinopterygii> , economics , balance (ability) , exchange rate , short run , fishery , international economics , business , monetary economics , cointegration , econometrics , biology , microeconomics , profit (economics) , social psychology , psychology , capital formation , neuroscience , financial capital
The world demand for fish has been increasing. Malaysia has a high fish trade with other countries.However, Malaysia, which has been one of the main fish producers given its long coastlines, stillexperiences a fish trade deficit. The present study aims to explore the effect of macroeconomicfactors on the Malaysian fish trade balance by implementing the Vector Error Correction Model(VECM) on the time series data from 1976 to 2016. The findings reveal that foreign income ispositively correlated with the trade balance in both short-run and long-run. Nevertheless, tradeopenness, depreciation of exchange rate, and money supply show a negative effect on the tradebalance for the long-run mainly. The incidents are mainly due to fish import dependence and a lackof capacity of exporting fish. To strengthen the trade balance, reducing fisheries products exportduties and restricting imported fisheries products are highly recommended.