Ranking Sectors Changes of the Malaysian Economy: Input-Output Approach

Abstract

This study attempts to re-investigate the production structure change for Malaysia economy through the ranking sectors changes over the period 1983-2000. We used four input-output tables had published so far by Department Statistics of Malaysia (DSOM) for the period under study. The study employed the Leontief model for demand side (Input inverse (I-A)^-1) for forward linkages indices, while supply side (Output Inverse, (I-O)^-1) for backward linkages indices to examine the ranking sectors structure changes. New evidence is found in this study: first, the integration degree between demand and supply side for the Malaysian economy still remain weak. Second, the rank correlation coefficients between forward and backward indices are not significant and very weak. Third, the linkages between the commodities sectors and the rest of the economy still remain weak. Fourth, there is still a high dependency on the primary sectors, such us Oil palm, Rubber primary products and Wood sectors. Finally, fifth, the main results of the development policies were to transform Malaysia from an exporter to an importer foodstuff and other agriculture products.