Estimating the Domestic Determinants of Foreign Direct Investment Flows in Malaysia: Evidence from Cointegra tion and Error-Correction Model

College of Social and Economic Studies
University of Juba,
P. O. Box 321/1, Khartoum Sudan

yol40@yahoo.com

Abstract

This study investigates the domestic short-run and long-run factors that influence FDI flows into Malaysia using annual data over period 1975-2006. After ascertaining that the series are I(0), the cointegration test statistics identify three cointegrating relations among the series, which implies an existence of long-run relationship among the variables in the study. The results of the long-run FDI equa tion indicate that FDI flows in Malaysia are positively influenced by real exchange rate, GDP growth and infrastructure while negatively by exports. In the short run, FDI flows are negatively influenced by its own lags, GDP growth, infrastructure and exports, while positively affected by economy’s openness and real exchange rate variables. The error-correction term suggests that approximately 12 percent of total disequilibrium in FDI flows was being corrected in each year in Malaysia across the study period.

Keywords

Citation

Marial, A. Y. (2009). Estimating the Domestic Determinants of Foreign Direct Investment Flows in Malaysia: Evidence from Cointegra tion and Error-Correction Model. Jurnal Pengurusan, 28, 3–22.

@article{yol2009estimating,
  title={Estimating the Domestic Determinants of Foreign Direct Investment Flows in Malaysia: Evidence from Cointegra tion and Error-Correction Model},
  author={Marial, A. Yol},
  journal={Jurnal Pengurusan},
 

volume={28},
  number={},
  pages={3—22},
  year={2009},
  doi={},
  publisher={Penerbit UKM},
}

Export Bibliography:

No. of views: 128

   

Article received:  
Accepted for publication:  
Available online: 

Issue logo

28 (2009) 3 – 22

Download PDF

Share via:

Receive updates when new articles are published