Ethnic disparity in financial fragility in Malaysia
International Journal of Social Economics
ISSN: 0306-8293
Article publication date: 15 August 2018
Issue publication date: 7 January 2019
Abstract
Purpose
The purpose of this paper is to investigate the extent of financial fragility and its disparity across ethnic groups in Malaysia. Disparities related to income and wealth are major concerns as they breed conflict and social instability. The study also compares the level of financial fragility of Malaysians with their neighboring Asian counterparts.
Design/methodology/approach
This study uses the World Values Survey to construct two financial fragility measures. Descriptive analysis is used to compare the level of financial fragility of Malaysia with other Asian countries. Ordinary least squares and generalized ordered logit regressions are applied to determine the existence of ethnic disparity in financial fragility in Malaysia.
Findings
There exist ethnic differences in financial vulnerability in Malaysia where Malay and Indian are in a more financially fragile situation compared to Chinese. Other socio-economic factors and character trait also impact financial fragility. Compared to neighboring countries, the level of financial fragility in Malaysia is low. Nevertheless, over 40 percent of the Malaysians are just getting by in terms of their expenditure relative to income. They may be at risk to financial shocks without adequate savings or funds.
Social implications
Ethnic disparity in financial vulnerability added to the inequality in income and wealth can pose a serious threat to Malaysia which attempts to achieve long-lasting social harmony and sustainable development.
Originality/value
This is the first study that attempts to compare the level of individual financial fragility across Asian countries. It also makes use of a larger scale survey and a more representative sample to examine ethnic disparity in financial fragility in Malaysia. In addition, character trait is included in the analysis to provide a better understanding of human behavior in affecting financial outcomes.
Keywords
Acknowledgements
The author of this paper has not made their research data set openly available. Any enquiries regarding the data set can be directed to the corresponding author.
Citation
Abdullah Yusof, S. (2019), "Ethnic disparity in financial fragility in Malaysia", International Journal of Social Economics, Vol. 46 No. 1, pp. 31-46. https://doi.org/10.1108/IJSE-12-2017-0585
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited