Malaysian Foreign Direct Investment Flows Under Fixed Exchange Rates System (1998-2005) The Case Of FDI Inflows From Northeast Asia Countries
The purpose of this dissertation is to investigate the relationship between Malaysian fixed exchange rates regime (1998-2005) and its foreign direct investment inflows. This study attempts to study the impact of a currency depreciation or devaluation (specifically in Malaysia case) and the flows of...
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| Format: | Thesis |
| Language: | English English |
| Published: |
2008
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| Online Access: | http://etd.uum.edu.my/295/1/Nurul_Salizawatee_Bt._Mahpar.pdf http://etd.uum.edu.my/295/2/Nurul_Salizawatee_Bt._Mahpar.pdf http://etd.uum.edu.my/295/ |
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| Summary: | The purpose of this dissertation is to investigate the relationship between Malaysian fixed exchange rates regime (1998-2005) and its foreign direct investment inflows. This study attempts to study the impact of a currency
depreciation or devaluation (specifically in Malaysia case) and the flows of Malaysia foreign direct investment in the period of currency crisis (1998-2005) which Malaysian Ringgit had been pegged with RM 3.80/USD.
Focus of this study will look at the Malaysia flows of foreign direct investment from Northeast Asian countries especially from Japan, South Korea, Hong Kong, and Taiwan over the pegging period of 1998-2005. This study will look at the inflows of foreign direct investment from those countries to see the effect of currency devaluation to the foreign direct investments inflows to Malaysia.
In order to obtain the relationship between exchange rates and foreign direct investment, the Multiple Regression Analysis (MRA) method has been used. Results from the analysis suggest that Malaysian fixed exchange rates regime for the period of 1998-2005 does not have a significant relationship to its foreign direct investment inflows from Northeast Asian countries.
However, results for control variables such as labor cost, interest rate, and GDP of Northeast Asian countries as well as Malaysia do have a significant impact to the
inflows of Malaysian foreign direct investment. Under the fixed exchange rate policy, Malaysia was able to sustain and attract inward foreign investment due to the lower costs of production compared to others affected countries. Due to this, the policy helped so much to ensure Malaysia competitiveness is lasting even under the crisis pressures. |
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