BUKU ABSTRAK - Universiti Putra Malaysia

Social Sciences
Short- and Long-run Effects of Sustainable Forest Management Practices on West
Malaysian Log Supply: An ARDL Approach
Mr. Abdul Rahim Abdul Samad
Mohd. Shahwahid Hj. Othman
Institute of Tropical Forestry and Forest Products, University Putra Malaysia,
43400 UPM Serdang, Selangor, Malaysia.
+603-8946 7630; abrahim@econ.upm.edu.my
The Malaysian log supply is facing deficit since 1995; thereafter major timber products have moved from
resource surplus to one of deficit. It seems obvious that without planted forest in the future, the timber industries
have almost reached the limit for growth. The log supply model for West Malaysia is based on an equation of
domestic log supply from natural and planted forests as a function of weighted price of log, annual logging
area and royalty of logs. The results showed that the bounds test of log supply model was cointegrated at 10%
significance. The short-run analysis revealed that log supply would increase as the price of logs increased.
However, in the long run, it would lead to substantial reduction in the log supply. This is because when the price
of logs increases, the log supply tends to decrease. It is believed that this is due to controlled production and the
stringent harvesting regulation to achieve sustainable forest management. Furthermore, an increase in domestic
price of logs would help to compensate for the lost volumes in the long run.
Keywords: Cointegration analysis, price of logs, timber products, conservation, design strategies
Short Run and Long Run Effects of the World Crude Oil Prices on the Malaysian
Natural Rubber and Palm Oil Export Prices
Mr. Abdul Rahim Abdul Samad
Zariyawati Mohd. Ashhari and Mohd. Shahwahid Hj. Othman
Faculty of Economics and Management, University Putra Malaysia,
43400 UPM Serdang, Selangor, Malaysia.
+603-8946 7630; abrahim@econ.upm.edu.my
With regard to the increase of world crude oil prices, it is time to examine more carefully the claim that the
increase in world crude oil prices tends to increase commodity prices. Hence, we examine the major commodity
prices in Malaysia namely palm oil prices and natural rubber prices. We will analyse the relationship of both
commodities prices with world crude oil prices using the autoregressive distribution lag (ARDL) approach. Beside
the analysis of bound testing approaches to see the level of relationships, short run and long run effects also are
carried out in order to investigate which period has been significantly effected by the increase of world crude oil
prices. The result reveals that long run relationship between world crude oil prices and both commodities prices
are exists. Fortunately the world crude oil coefficient in the long run for both models of this policy variables are
statistically significant with positive impact and it is possible to relate these impacts of government programmes
for future domestic and international market in the perspective of palm oil and natural rubber. With the expected
increase in the world crude oil prices which tends to increase both commodities prices, manufacturers would
have to serious look into their strategy seriously to promote more on export market compared to domestic market.
Keywords: Palm oil prices, natural rubber prices, world crude oil prices, autoregressive distribution lag (ARDL), long run
relationship
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