Malaysian Journal of Business, Economics and Management

The Optimization Model of the Phillips Curve using Shapiro-Stiglitz Model and the Kydland-Prescott Model for Fiscal and Monetary Policy Analysis

Peter Jeff Camaro — 2026-06-08

Modern economic policy in many countries prioritizes short-run growth objectives. While such policies may generate immediate economic gains, they can also create long-run sustainability concerns through their effects on inflation and unemployment dynamics. Monetary economics proposes long-run equilibrium mechanisms that may mitigate these macroeconomic fluctuations. This study develops an analytical framework that integrates the Shapiro–Stiglitz efficiency wage model of unemployment with the Kydland–Prescott model of inflation setting and applies a Lagrangian optimization framework to estimate the optimal rate of economic growth subject to inflation targets set by the central bank of the Philippines. To examine the structural relationships implied by the theoretical framework, a Two-Stage Least Squares (2SLS) regression is employed, with results suggesting a significant disconnect between the policy objectives of the central government and those of the central bank. The predictive performance of the model is further evaluated using a quadratic ordinary least squares (OLS) regression comparing forecasted and observed output growth rates. The estimated model produces a higher coefficient of determination and statistically significant coefficients relative to regressions using Philippine GDP growth data, suggesting that the GDP optimization model may provide a useful analytical tool for informing macroeconomic policy design.

Mediating Effect of Employees Attitude on the Relationship Between Reward and Employees’ Engagement in Malaysian Private Higher Education around Klang Valley, Malaysia

Mohd Nazrin Burhanuddin — 2026-06-09

The model utilizes Partial Least Square (PLS) procedure on data collected from a survey that yielded 381 usable questionnaires. The goal of this study is to look into the indirect effect of employees’ attitude, reward, and employees’ engagement relationship in Malaysian private higher education around Klang Valley, Malaysia. To analyse the causal relationships amongst employees’ attitude, reward, and employees’ engagement, the Structural Equation Model (SEM) was adopted. The results showed that employees’ attitude and reward enhance employees’ engagement in Malaysian private higher education institute in Malaysia. It is essential to do the research using an experimental design by using longitudinal data in Malaysian private higher education institute by using vigorous measures. The findings recommend that the private higher education institute should put emphasis on employees’ attitude, and reward to ensure the advantageous increase in higher education employees’ engagement at their workplace. This research is one of the first recognized efforts to use employees’ attitude, and reward to study employees’ engagement in the private higher education sector in Malaysia by using Partial Least Square (PLS) procedure.

Effects of Entrepreneurial Framework Conditions and Psychological Capital on Informal Business Performance Run by Women Hawkers and Small Vendors

Nurul Hidayana Mohd Noor — 2026-06-09

The primary objective is to examine the impact of entrepreneurial framework conditions and psychological capital on sustainable business performance among women hawkers and small vendors. The second objective is to investigate the indirect impact of psychological capital. A study was conducted in Terengganu, Kelantan, Selangor, and Negeri Sembilan, Malaysia, to understand this phenomenon, involving 200 women hawkers and small vendors. The study data, obtained through a questionnaire, were analyzed using Structural Equation Modeling (SEM). This paper found that entrepreneurial framework conditions and psychological capital have a significant influence on sustainable business performance. Second, psychological capital mediates the relationship between entrepreneurial framework conditions and sustainable business performance. This study contributes to the literature by strengthening the underexplored theory of women's entrepreneurship in the informal sector through a holistic understanding of the influence of internal and external factors, thereby supporting the development of a more inclusive and contextual theory that aligns with the socioeconomic realities of women in the sector.

The Impact of the Digital Economy on SME Business Performance: The Moderating Role of Digital Capability and the Mediating Role of Value Creation

Nurul Hermina — 2026-06-09

This study investigates the impact of the digital economy on the performance of micro, small, and medium enterprises (MSMEs) in West Java, Indonesia, by integrating the roles of digital capabilities and value creation. This research develops and assesses a cohesive framework that links the digital economy, digital capacity, and value creation inside a singular structural model, unlike other studies that analyze these components independently. Analysis of survey data from 127 MSMEs employing structural equation modeling (SEM) reveals that digital competency does not influence the relationship between the digital economy and value creation. The Sobel test confirms that value creation fully mediates the impact of the digital economy on business success. This integration significantly demonstrates that the adoption of the digital economy enhances performance only when transformed into concrete value-creation processes—through value networking, business model enhancement, coopetition, and digital innovation—highlighting strategic pathways for MSMEs in evolving digital economies.

Analyzing Corruption, Political Influence, Socioeconomic Conditions, and Living Standards in Pakistan

Muhammad Ahmad Mazher — 2026-06-09

The analysis examines the relationship between economic indicators and final household consumption expenditures (FHCE) in Pakistan from 1991-2023. Four variables were used: total population, corruption perception index, political stability, and absence of violence. The results show a positive association between the general population and FHCE in both the short and long terms. However, the corruption perception index reduces FHCE by 0.4430 units, with a negative short-term effect. Political stability has a moderate long-term effect. PSVA has a negative influence on FHCE. The model explains 85.60% variation in FHCE, suggesting population growth management, corruption control, and political stability policies.

The Economic Situation and Strategies of Ride-Hailing Drivers Under Sharing Economy in Cavite, Philippines

Princess Camille Sapitin — 2026-07-20

The study explores the rise of the sharing economy in Cavite, Philippines, focusing on the socioeconomic and work conditions, earning opportunities, and the different strategies of ride-hailing drivers. The study used a descriptive-comparative research design utilizing a sample size of 385 driver-participants. Key findings indicate that the majority of the ride-hailing drivers in Cavite were in the middle age (32-44 years), married, and owned their transport vehicle. Most drivers work full time, with a monthly income of P23,000-P31,000 and are living in Bacoor City. Results indicate that labor standards are generally met, with drivers reporting positive working conditions and adequate platform support. Surge-chasing emerged as the most effective strategy for income maximization. However, drivers continue to face challenges, including heavy traffic during peak hours, inappropriate passenger behavior, and limited transport insurance coverage. Motivational factors include passenger tipping and effective route and navigation management. The study underscores the need for strengthened government oversight and enforcement mechanisms to address unfair practices and ensure compliance with platform regulations. Enhanced regulatory engagement can contribute to safeguarding workers’ welfare while advancing the public interest within the evolving Philippine transportation economy.

The Causal Impacts of International Standard Certifications on Firm Performance: Evidence from Malaysia

Gairuzazmi Mat Ghani — 2026-07-20

The objective of this study is to examine the causal effects of international standards certification (ISC) on the performance of Malaysian firms, while accounting for potential endogeneity between ISC and firms’ performance. Previous studies have rarely accounted for endogeneity between ISC and firms’ performance, which may bias estimates and lead to incorrect conclusions about their causal relationship. This study uses data from the World Bank Enterprise Survey (WBES), 2019-20. The estimation methods account for the endogeneity between ISC and firms’ performance by combining instrumental variables with treatment-effect modelling. Three performance measures are used: sales and gross profit per employee, and the cost of goods sold scaled by sales. The analyses, both univariate and multivariate, demonstrate that ISC improves the performance of Malaysian firms, especially manufacturing firms; however, the finding is not supported for firms in the service sector. Foreign ownership also improves firms’ performance. In terms of endogeneity, the cost of goods sold and performance are endogenously related, whereas sales and gross profit per employee are not.