Sains Malaysiana 50(8)(2021): 2455-2468

http://doi.org/10.17576/jsm-2021-5008-26

The Relationship between Economic Growth, Small and Medium Enterprises and the Number of Employees in Malaysia using Vine Copula Approach

(Hubungan antara Pertumbuhan Ekonomi, Perusahaan Kecil dan Sederhana dan Jumlah Pekerja di Malaysia menggunakan Pendekatan Vain Kopula)

MAZMIRA ADAN^1,2 & SAIFUL IZZUAN HUSSAIN¹*

¹Department of Mathematical Sciences, Faculty of Science and Technology, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor Darul Ehsan, Malaysia

²Department of Statistics, Malaysia, Federal Government Administrative Center, 62514 Putrajaya, Federal Territory, Malaysia

Received: 19 May 2020/Accepted: 11 December 2020

ABSTRACT

This paper investigates the dynamic linkages of dependency between economic growth, the development of small and medium enterprises (SMEs) in Malaysia represented by SMEs’ value-added, and the number of employees in Malaysia, shown by the total number of SMEs’ employees in Malaysia as an additional variable. A vine copula methods was used to assess the linkage between these three variables by utilizing the panel data sets from 1998-2017. The results confirmed that dependency modeling, using vine copulas, is useful for high dimensional distributions of binding affinity between these variables. Vine copulas provide a versatile and flexible approach to the study. The results show that there is a strong positive correlation among the variables. The dependence between the SMEs’ growth and the total number of employees is the strongest, followed by the dependence between SMEs’ growth and economic growth. This study also found that the interrelation among the variables and reliance structure is also influenced by the country’s economic system and situation.

Keywords: Copula; economic growth; SMEs; vine copula

ABSTRAK

Penyelidikan ini mengkaji tentang hubungan kebergantungan dinamik antara pertumbuhan ekonomi, pertumbuhan perusahaan kecil dan sederhana (PKS) Malaysia dan juga jumlah pekerja di Malaysia yang diwakili oleh jumlah pekerja PKS di Malaysia sebagai pemboleh ubah tambahan. Pendekatan vain kopula digunakan untuk menilai hubungan antara tiga pemboleh ubah ini dengan menggunakan set data panel yang meliputi tempoh 1998-2017. Hasil kajian menunjukkan bahawa penggunaan vain kopula membolehkan hubungan yang penting di kalangan pemboleh ubah membentuk model kebergantungan untuk taburan berdimensi tinggi. Pendekatan ini menawarkan kefleksibelan yang tinggi dan sangat sesuai digunakan untuk kajian ini. Hasilnya menunjukkan bahawa terdapat korelasi positif yang kukuh antara pemboleh ubah dan kebersandaran antara pertumbuhan PKS dan jumlah pekerja adalah yang paling tinggi, diikuti oleh kebersandaran antara pertumbuhan PKS dan pertumbuhan ekonomi. Kajian ini juga mendapati bahawa hubungan dinamik antara pemboleh ubah yang dikaji turut dipengaruhi oleh struktur dan keadaan ekonomi negara.

Kata kunci: Kopula; pertumbuhan ekonomi; PKS; vain kopula

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*Corresponding author; email: sih@ukm.edu.my