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A re-evaluation of the determinants of FDI in Malaysia

This paper examines the key determinants fo foreign direct investment (FDI) in Malaysia using time series analysis techniques that address the problem of non stationarity. Specifically, variables such as trade openness, infrastructure quality, market-size, human capital and natural resource are tes...

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Main Authors: Abu Bakar, Nor'Aznin, Lau, Ming Sern
Format: Article
Language:English
Published: Universiti Utara Malaysia 2005
Subjects:
HF Commerce
Online Access:http://repo.uum.edu.my/2925/1/mmj9122.pdf
http://repo.uum.edu.my/2925/
http://mmj.uum.edu.my/
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spelling my.uum.repo.29252016-05-30T03:08:50Z http://repo.uum.edu.my/2925/ A re-evaluation of the determinants of FDI in Malaysia Abu Bakar, Nor'Aznin Lau, Ming Sern HF Commerce This paper examines the key determinants fo foreign direct investment (FDI) in Malaysia using time series analysis techniques that address the problem of non stationarity. Specifically, variables such as trade openness, infrastructure quality, market-size, human capital and natural resource are tested using the ADF and cointegration tests to ensure that the regression is not spurious. In line with several other empirical studies, result obtained comfirm that traditional factors such as market size are still dominant factors shaping the distribution of FDI in Malaysia, while the natural resource availability is the only insignificant variable. However, other non-traditional factors such as trade openness, agglomeration and human capital are also greatly increasing in importance, especially during this era of globalisation, Beside that, the complex global integration strategies adopted by multi-national companies (MNCs) which favour the presence of sophisticated and created assets in host countries over most other determinants also play an important role. Therefore, it is crucial that developing countries over most other determinants also play an important role. Therefore, it is crucial that developing countries formulate policies that improve local infrastructure, local skills and build up their human resourse capabilities to increase competition for FDI. Universiti Utara Malaysia 2005 Article PeerReviewed application/pdf en http://repo.uum.edu.my/2925/1/mmj9122.pdf Abu Bakar, Nor'Aznin and Lau, Ming Sern (2005) A re-evaluation of the determinants of FDI in Malaysia. Malaysian Management Journal, 9 (1 & 2). pp. 13-23. ISSN 0128-6226 http://mmj.uum.edu.my/
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HF Commerce
spellingShingle HF Commerce
Abu Bakar, Nor'Aznin
Lau, Ming Sern
A re-evaluation of the determinants of FDI in Malaysia
description This paper examines the key determinants fo foreign direct investment (FDI) in Malaysia using time series analysis techniques that address the problem of non stationarity. Specifically, variables such as trade openness, infrastructure quality, market-size, human capital and natural resource are tested using the ADF and cointegration tests to ensure that the regression is not spurious. In line with several other empirical studies, result obtained comfirm that traditional factors such as market size are still dominant factors shaping the distribution of FDI in Malaysia, while the natural resource availability is the only insignificant variable. However, other non-traditional factors such as trade openness, agglomeration and human capital are also greatly increasing in importance, especially during this era of globalisation, Beside that, the complex global integration strategies adopted by multi-national companies (MNCs) which favour the presence of sophisticated and created assets in host countries over most other determinants also play an important role. Therefore, it is crucial that developing countries over most other determinants also play an important role. Therefore, it is crucial that developing countries formulate policies that improve local infrastructure, local skills and build up their human resourse capabilities to increase competition for FDI.
format Article
author Abu Bakar, Nor'Aznin
Lau, Ming Sern
author_facet Abu Bakar, Nor'Aznin
Lau, Ming Sern
author_sort Abu Bakar, Nor'Aznin
title A re-evaluation of the determinants of FDI in Malaysia
title_short A re-evaluation of the determinants of FDI in Malaysia
title_full A re-evaluation of the determinants of FDI in Malaysia
title_fullStr A re-evaluation of the determinants of FDI in Malaysia
title_full_unstemmed A re-evaluation of the determinants of FDI in Malaysia
title_sort re-evaluation of the determinants of fdi in malaysia
publisher Universiti Utara Malaysia
publishDate 2005
url http://repo.uum.edu.my/2925/1/mmj9122.pdf
http://repo.uum.edu.my/2925/
http://mmj.uum.edu.my/
_version_ 1644278367141232640
score 13.211869

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