International Journal of Academic Research in Business and Social Sciences

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An Application of Heteroskedasticity Testing In Economic Growth Model

Open access

Emilda Hashim, Norimah Rambeli @ Ramli, Mohd Kamarul Azriq Yusof, Siti Haslinda Abdul Aziz

Pages 16-23 Received: 30 Nov, -0001 Revised: 30 Nov, -0001 Published Online: 01 Nov, 2016

http://dx.doi.org/10.46886/IJARBSS/v6-i11/2370
This study is intended to analyze the contribution of agriculture to economic growth in Malaysia. Time series data, ranging from 1983 to 2014, and Ordinary Least Least (OLS) method are used in this study. This study reveals that agricultural sector provides an important contribution to the gross domestic product (GDP) and exports, at a declining rate. In fact, this sector also contributes to the industrial chain in manufacturing and services sectors. In addition, the analysis of the t test shows that the variables of agricultural growth and the contribution of agriculture are positively related, while the workforce in agriculture is negatively related to economic growth. From heteroskedasticity analysis, the growth of agriculture and agriculture's contribution are not important in influencing Malaysian economic growth, in line with the declining growth and contribution of agricultural sector toward GDP. This situation is consistent with changes in structure of Malaysoan economy from agriculture to industry to services.