![Sample our Global Development journals, sign in here to start your access, latest two full volumes FREE to you for 14 days]({"type":"image" , "src" : "/sda/5929/TOC-Subject-Sample-2021-Global-Development.jpg"})
ABSTRACT
Malaysia plans to emerge as one of the high-income economies by 2020 through the Economic Transformation Programme. A key component of this programme is to adopt more trade liberalisation policies that can generate a variety of economic activities, particularly more jobs. Although the integration with the world market bears the promise of prosperity for the developing and transitional economies, such integration may also adversely affect such economies. Preceding studies regarding labour market and international trade policies are still inconclusive and raise questions that require further examination; particularly in terms of whether exposure to the external sector can create or destroy jobs. The present study evaluates how Malaysia labour market has responded to the economic globalisation of the country. The study focuses on the long-run impact of economic globalisation on unemployment within the period between 1980 and 2014. The study uses autoregressive distributive lags method to examine the pattern of the relationship. The results show that economic globalisation have significant and positive impact on reducing unemployment in Malaysia in the long run. These findings indicate that policy-makers in Malaysia should facilitate the economy globalisation to maintain the current low level of unemployment rate.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1. The KOF index is widely used by several studies to investigate the impact of globalisation on different economic variables (see Bezemer and Jong-A-Pin Citation2013; Potrafke Citation2013; Gaston and Rajaguru Citation2013).
2. For detailed information on the theoretical model on trade liberalisation and unemployment, see, for example, Dutt et al. (Citation2009) and Hasan et al. (Citation2012).
3. Ho & Tan (2008) refer to ‘creative destruction’ as a process by which new jobs are created in response to technological progress, while, at the same time, existing jobs using older technology become obsolete.