A NETWORK ANALYSIS OF MALAYSIAN ECONOMIC SECTORS

Abstract

Over the past 50 years, the Malaysian economy has seen many changes in line with its economic policies. In the early 70s, the country’s economic achievements were driven by the agricultural sector, but today it has shifted to the services sector. There are specific sub-sectors in the services sector that have played a larger role in the shift and subsequent contribution to the country’s economic success. There are also services subsectors related to the non-service sector, such as the manufacturing and agriculture or other sectors. In Malaysia, the input-output table is one of the most widely used mediums for viewing and analysing the local economic structure. However, the analysis of the subsectoral relations derived from the input-output analysis is limited. This study examines the position and role of sub-sectors and inter-sectoral flows in the national economic system by combining input-output tables with network modelling. It also analyses the structure of the Malaysian economy of 2015 by using input-output data and network analysis to visualise the contribution of key sectors of the economy. Based on network analysis, it was found that seven sub-sectors are significant contributors of which four were from the manufacturing sector. A clear understanding of the economic position of the sectors is crucial because identifying the different roles of an industry in the complex economic network, policymakers can formulate and implement policies more objectively and effectively.