3.

Methodology Based on our work research on this project , the final empirical model is specified as follows : GDPm = 0 + 1EGW + 2WRT + 3TnS where GDP refers to Gross Domestic Product of Malaysia. EGW refers to Electricity, Gas and Water services, WRT refers to Wholesale and Retail Trade services, and TnS refers to Transport and Storage services. We used Stepwise Regression technique, Backward Elimination method, which begin with the entire nine sub-services (independent variables), which are Electricity Gas and Water services, Wholesale and Retail Trade services, Accomodation and Restaurant services, Transport and Storage services, Communication service, Finance and Insurance services, Real Estate and Business services, Government, and Other services. And the data source we used was time series data for the period 2003 2011, quarterly, taken from Central Bank of Malaysia (Bank Negara Malaysia), www.bnm.gov.my. We put all above nine sub-services (independent variables) and eliminates / deletes one least significant sub-services (independent variables) at each iteration. By using Minitab Statistical software, it actually eliminates the less significant sub-services at the same time, it delete one or more less significant sub-services at once. Minitab eliminated four of nine subservices, and left five sub-services, which are Electricity Gas and Water services, Wholesale and Retail Trade services, Transport and Storage services, Government services, and Other services. It deleted Accomodation and Restaurant services, Communication service, Finance and Insurance services, Real Estate and Business services.

These regression equation with five significant sub-services sector to Malaysias Gross Domestic Product (GDP) has Coefficient of Determination (R2) of 99.5%, which is a strong relationship. From these five sub-services, we searched for the three most significant sub-services that most affected to Malaysias GDP by comparing the T-values between each sub-services portrayed at the Minitab output table. The T-value measures how many standard errors the coefficient is away from zero. Generally, any T-value greater than +2 or less than 2 ( |T| > 2 ) is acceptable. The higher the T-value, the greater the confidence we have in the coefficient as a predictor. Low T-values are indications of low reliability of the predictive power of that coefficient. By eliminating one sub-service that has smallest T-value, and after its result came up, we did it one more time with the same technique, we reached to the three sub-services that most significant or affected to Malaysias GDP, which are Electricity Gas and Water services, Wholesale and Retail Trade services, Transport and Storage services. This regression equation with three sub-services as independent variables and GDP as dependent variable has Coefficient of Determination (R2) of 99.3%, meaning, 99.3% of proportion or change in Malaysias Gross Domestic Product (GDP) is explained by the variation or change in these three sub-services sector, which is a strong relationship.