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Jurnal Ekonomi Malaysia

41 2007 135 – 145

Foreign Direct Investment Location Decision and Pollution: Evidence from Malaysia

School of Economic Studies
Faculty of Economics and Business
Universiti Kebangsaan Malaysia
43600 UKM, Bangi
Selangor Darul Ehsan
Malaysia

ahamid@pkrisc.ukm.my

School of Economic Studies
Faculty of Economics and Business
Universiti Kebangsaan Malaysia
43600 UKM, Bangi
Selangor Darul Ehsan
Malaysia


Abstract

There is considerable development gap between regions in Malaysia. The objective of this paper is to examine the impact of regional environmental pollution condition on foreign direct investment location decision across regions in Malaysia. In this study, several regional environmental variables are included as detrminants of foreign direct investment location decision. The study uses state level data from 1995 to 2004 on a random effect panel regression model. Result from this study indicate that while positive economic circumstances attact foreign direct investment, negative environmental condition, especially air pollution, serve as push factors. This finding suggests that local regions should improve their environmetal condition in order to stand a better chance of attacting foreign as well as local invesment.

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Jaafar, , & Hossain, (2007). Foreign Direct Investment Location Decision and Pollution: Evidence from Malaysia. Jurnal Ekonomi Malaysia, 41, 135–145.

@article{Jaafar2007Foreign,
  title={Foreign Direct Investment Location Decision and Pollution: Evidence from Malaysia},
  author={Jaafar, Abdul Hamid and Hossain, Md},
  journal={Jurnal Ekonomi Malaysia},
  volume={41},
  number={},
  pages={135—145},
 

year={2007},
}

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