Page 220 - Contributed Paper Session (CPS) - Volume 8

CPS2256 Norzarita Samsudin
furniture or household appliances for example). Gross domestic product (GDP)
is a monetary measure of the market value of all the final goods and services
produced in a period of time, often annually or quarterly. Real GDP estimates
are commonly used to determine the economic performance of a whole
country or region, and to make international comparisons.
Sales value of retail trade for Malaysia grew quite significant lately. In 2016,
it registered 8.7 per cent growth, while in 2017, it posted 11.5 per cent.
Meanwhile, in quarter two 2018, sales value of Malaysia retail trade grew 9.9
per cent, while 13.0 per cent was recorded in quarter three 2018. In the
meantime, Malaysia’s GDP registered 4.2 per cent growth in 2016, and 5.9 per
cent in 2017, respectively. In quarter two 2018, Malaysia GDP grew 4.5 per
cent, while 4.4 per cent was recorded in quarter three 2018 (Department of
Statistics Malaysia, 2018).
The objective of this paper is to study relationship between real GDP and
sales value of retail trade of Malaysia.

2. Literature Review
According to Deloitte Insight Article (2018), retail trade is a key avenue of
consumer spending and makes a major contribution to the labour market. The
retail sector however, is undergoing some changes, which have impacted total
sales, revenues of different store types, and employment. Retail trade is also a
major contributor to employment. According to the Bureau of Labour
Statistics’ establishment survey, retail trade made up 10.8 per cent of total
non-farm payrolls in the economy in the year until November 2017. In this
paper, it is also mentioned that although retail sales have gone up, they have
fallen slightly when compared to GDP.
Shehnaz Tehseen (2016), in his study mentions that retail industry is given
much more importance because of its direct link with the final consumers.
Retailing as a commercial transaction is very important due to the
consumption of goods and services by the buyers through family, personal or
household use. In 2017 Malaysia has been ranked third in the 2017 Global
Retail Development Index (GRDI) for the second consecutive year.
Management consulting firm A.T. Kearney attributed the high ranking to the
influx of tourists, higher disposable income and government investments in
infrastructure had boosted the retail industry. Malaysia’s retail market
continued to grow despite a slight dip in overall GDP growth and short-term
pressures of currency fluctuation and inflation.
In other study, Raja Nurul Aini and Amalina (2017) investigate the
relationship between GDP growth and the factors such as Inflation, Foreign
Direct Investment (FDI) and Female Labour Force Participation in Malaysia.
Least Square Method (OLS) and Augmented Dickey Fuller (ADF) are used for
the analysis. The results identify that among the factors of FDI and Female

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