FINANCIAL OPENNESS FOR SMALL OPEN ECONOMY
The openness declared in Malaysia aims to strengthen the economic interlinkages with other economies and enhancing the role of the liberalization itself as a key enabler and mechanism of economic growth.The main concern of this study is to examine the correlation between financial openness towards economy and the total output growth. Primary attention has been given, for not just focusing on country level but also going in depth into manufacturing industry level to look at this relationship based on Malaysia experience. By using de facto financial openness, the result shows that financial openness is significant for both in country and industry level and support that the volume of country’s assets and liabilities did impact on economy and output growth. However, in Granger causality test the significant level only shows on a country level.
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