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Predicting the Financial Fragility in Malaysia

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Proceedings of the 2nd Advances in Business Research International Conference

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Abstract

Financial fragility is a priority topic for many policymakers, practitioners, and researchers due to its impact on the economy. Financial fragility is also termed financial instability leading to financial crisis. This paper attempts to predict the existence of financial fragility by examining its impact through the proxy of corporate and government-linked companies and their role in Malaysia’s macroeconomics. The data set was taken from years 2005 to 2015 on a quarterly basis. By employing ordinary least square (OLS) time series analysis, our result found that government bond spreads can better explain the macroeconomic variables than corporate bond spreads. Corporate bond spreads only have a relationship with the inflation rate. As another indicator for financial fragility, KLCI stock returns are found to have a significant relationship with all macroeconomic variables.

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Author information

Authors and Affiliations

  1. Faculty of Business Management, Universiti Teknologi MARA (UiTM), Shah Alam, Malaysia

    Nurziya Muzzawer & Balkis Haris

  2. Faculty of Business Management, Universiti Teknologi MARA (UiTM), Shah Alam, Sabah, Malaysia

    Imbarine Bujang

Authors
  1. Nurziya Muzzawer
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  2. Imbarine Bujang
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  3. Balkis Haris
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Corresponding author

Correspondence to Nurziya Muzzawer .

Editor information

Editors and Affiliations

  1. University Teknologi MARA , Shah Alam, Malaysia

    Fauziah Noordin

  2. Universiti Teknologi MARA , Shah Alam, Malaysia

    Abdul Kadir Othman

  3. Universiti Teknologi MARA , Shah Alam, Selangor, Malaysia

    Erne Suzila Kassim

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Muzzawer, N., Bujang, I., Haris, B. (2018). Predicting the Financial Fragility in Malaysia. In: Noordin, F., Othman, A., Kassim, E. (eds) Proceedings of the 2nd Advances in Business Research International Conference. Springer, Singapore. https://doi.org/10.1007/978-981-10-6053-3_15

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