The relationship between economic growth and foreign direct investment in Malaysia: based on location advantage channel
Foreign direct investment is an important indicator to boost the economic growth of Malaysia. Foreign direct investment was identified as a medium in order to acquire skills, knowledge, technologies and to internationalize business and at the same time to reduce debts of a nation. However, in the ye...
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| Format: | Thesis |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | https://eprints.ums.edu.my/id/eprint/11828/1/mt0000000651.pdf |
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| Summary: | Foreign direct investment is an important indicator to boost the economic growth of Malaysia. Foreign direct investment was identified as a medium in order to acquire skills, knowledge, technologies and to internationalize business and at the same time to reduce debts of a nation. However, in the year 2009, inflow of FDI into Malaysia had decline as much as 81.13 percent. McKern (1996), Kathuria (1998, 2000 and 2001) and Noorbakhsh et al. (2001) believed that FOI does not take place automatically in a nation. Whereby, inflow of FOI should be encouraged. Hence, this study aims to identify the channels that can influence economic growth through FOI in Malaysia. Location advantage channels were group using human capital development, financial development and environmental condition whilst FDI was used as an interaction as well as an Independent variable. The findings of the analysis clearly indicated that when FDI was used as an interaction with each location advantage channels, the interaction become insignificant in explaining the changes in economic growth. Thus, the study support that a certain value of location advantage channels were important to stimulate economic growth through inflow of FOI in Malaysia. |
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