Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
The Effect of Macroeconomics and Financial Factors on
Government Domestic Debt in Malaysia
Roslan Ja’afar *
Debt sustainability has been a major global concern among investors and policy makers,
especially in emerging countries due to lack of sources of income to invest in
development and economic growth. This paper aims to investigate the determinants of
Government Domestic Debt in Malaysia covering period from 1980 to 2013. Using
Johensen approach, the study found a significant relationship between government fiscal
position and domestic debt in Malaysia. This study also found that unstable
macroeconomic situation influences the increase in domestic debt in Malaysia.
Keywords: Debt Sustainability, Malaysia, Cointegration Analysis, Fiscal Position
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Roslan Ja’afar,*UKM-Graduate School of Business, the National University of Malaysia. Email:
jroslan@ukm.edu.my