The Export Demand for Malaysia's Electricals and Electronics: Empirical Evidence and Policy Implications

The export trade in electricals and electronics (E&E) has played a key role in industrializing the Malaysian economy. However, it cannot insulate itself against influences from the external sector such as the emergence of new competitors in the region and the slowdown of the U. S. economy, which represents one of the largest E&E export markets for Malaysia. The study attempts to explain what determines foreign demand (final and intermediate) for Malaysia's E&E exports based on SITC product groups in the short run and long run. It focuses upon an economic comparison between the electronic and electrical goods sub-sectors given their exports are highly diverse. The findings can shed light on issues relating to the future of the industry's export competitiveness, which can lead the economy's transition towards high-technology industrialization.