The Impact of Number of Employees, Palm Production and Export of Oil Palm on Malaysia Economic Growth

The agriculture sector in Malaysia especially for oil palm agriculture is the largest exporter and supplier after Indonesia the main source that contributes towards Gross Domestic Product (GDP). Growing oil palm agriculture provides the potential and opportunities to increase economic yields and create job opportunities for local people, especially those in rural areas. This study was conducted to examine the impact of the number of workers, palm fruit production and export of palm oil on GDP in Malaysia in terms of long and short term. To achieve the objectives of the study, the researcher has used a sample of secondary data from the Department of Statistics Malaysia from 1974 to 2019, which is 45 years using Time Series data. To identify the stationary of the variables, the Augmented Dickey-Fuller (ADF) test was used. To identify long-term relationships, the Long Run Bound Test (LRBT) was used. Meanwhile, to identify the short-term relationship, the Error Correction Model (ECM) method also was used in this study. The results of the ADF test was found that all the variables studied: the number of workers, palm fruit production and pal oil export were stationary. The effects of the variables in the agriculture sector have been given attention by the local government. Therefore, policy makers can use the result to improve existing economic policies as a measure to expand the country’s income sources in palm oil agriculture field and serve as a reference for stimulate country’s economic