Analysing the impact of financial market on Malaysian foreign direct investment
This study investigates the impact of financial market on foreign direct investment (FDI) in Malaysia using yearly data over the period of 1981 to 2014. Using stock market and credit market as proxy of financial market, the Johansen cointegration test and Vector Error Correction Model (VECM) are emp...
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2016
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Nordin, Sabariah |
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HG Finance Nur Dhania, Abdul Samad Analysing the impact of financial market on Malaysian foreign direct investment |
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This study investigates the impact of financial market on foreign direct investment (FDI) in Malaysia using yearly data over the period of 1981 to 2014. Using stock market and credit market as proxy of financial market, the Johansen cointegration test and Vector Error Correction Model (VECM) are employed to determine the long
run relationship. The VECM results indicate that the stock market does not have significant influence on FDI while the credit market has a significant and positive impact on FDI. This shows that even though the financial market does not become the main source of financing for foreign investors, its development is still an important agenda in attracting foreign investors to invest in Malaysia. Hence, this study provides insights for policy recommendation in the future in promoting FDI. In order to attract foreign investment, policy makers should not just focus on providing various incentives, but also should look at other factors which may indirectly affect the flows of FDI, such as the development of the financial market. |
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Thesis |
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Master's degree |
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Nur Dhania, Abdul Samad |
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Nur Dhania, Abdul Samad |
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Nur Dhania, Abdul Samad |
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Analysing the impact of financial market on Malaysian foreign direct investment |
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Analysing the impact of financial market on Malaysian foreign direct investment |
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Analysing the impact of financial market on Malaysian foreign direct investment |
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Analysing the impact of financial market on Malaysian foreign direct investment |
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Analysing the impact of financial market on Malaysian foreign direct investment |
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analysing the impact of financial market on malaysian foreign direct investment |
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Universiti Utara Malaysia |
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School of Economics, Finance & Banking |
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2016 |
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https://etd.uum.edu.my/6113/1/s817761_01.pdf https://etd.uum.edu.my/6113/2/s817761_02.pdf |
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my-uum-etd.61132021-04-19T03:12:59Z Analysing the impact of financial market on Malaysian foreign direct investment 2016 Nur Dhania, Abdul Samad Nordin, Sabariah School of Economics, Finance & Banking School of Economics, Finance and Banking HG Finance This study investigates the impact of financial market on foreign direct investment (FDI) in Malaysia using yearly data over the period of 1981 to 2014. Using stock market and credit market as proxy of financial market, the Johansen cointegration test and Vector Error Correction Model (VECM) are employed to determine the long run relationship. The VECM results indicate that the stock market does not have significant influence on FDI while the credit market has a significant and positive impact on FDI. This shows that even though the financial market does not become the main source of financing for foreign investors, its development is still an important agenda in attracting foreign investors to invest in Malaysia. Hence, this study provides insights for policy recommendation in the future in promoting FDI. In order to attract foreign investment, policy makers should not just focus on providing various incentives, but also should look at other factors which may indirectly affect the flows of FDI, such as the development of the financial market. 2016 Thesis https://etd.uum.edu.my/6113/ https://etd.uum.edu.my/6113/1/s817761_01.pdf text eng public https://etd.uum.edu.my/6113/2/s817761_02.pdf text eng public other masters Universiti Utara Malaysia Adam, A. M., & Tweneboah, G. (2009). Foreign direct investment and stock market development: Ghana's evidence. International Research Journal of Finance and Economics, 26, 178-185. Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2004). FDI and economic growth: the role of local financial markets. Journal of International Economics, 64(1), 89-112. Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2010). 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The impact of investment policy in a changing global economy: A review of the literature. World Bank Policy Research Working Paper, (7437). Gebrehiwot, A., Esfahani, N., & Sayim, M. (2016). The relationship between FDI and financial market development: The case of the Sub-Saharan African region. International Journal of Regional Development, 3(1), 64-80. Giles, D. E. (2007). Spurious regressions with time-series data: Further asymptotic results. Communications in Statistics—Theory and Methods, 36(5), 967-979. Hajilee, M., & Al Nasser, O. M. (2015). The relationship between financial market development and foreign direct investment in Latin American countries. The Journal of Developing Areas, 49(2), 227-245. Har, W. M., Teo, K. L., & Yee K. M. (2008). FDI and economic growth relationship: An empirical study in Malaysia. International Business Research, 1(2), 12-18. Henry, P. B. (2000). Do stock market liberalizations cause investment booms? Journal of Financial Economics, 58(1), 301-334. Hermes, N., & Lensink, R. (2003). Foreign direct investment, financial development and economic growth. The Journal of Development Studies, 40(1), 142-163. Johansen, S. (1991). Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models. Econometrica: Journal of the Econometric Society, 1551-1580. Kholdy, S., & Sohrabian, A. (2005, February). Financial markets, FDI, and economic growth: Granger causality tests in panel data model. In EFA 2005 Moscow Meetings. MIDA. (2014). Malaysia Investment Performance 2014. Kuala Lumpur. Ministry of Finance. (2001) Economic Reports 2001. Kuala Lumpur. Soumaré, I., & Tchana, F. T. (2015). Causality between FDI and financial market development: Evidence from emerging markets. The World Bank Economic Review, 29(suppl 1), S205-S216. World Bank. (2016), World Development Indicator 2016. Softcopy Database. World Bank. |