Abstract
Malaysia has shown a remarkable progress in its economic growth in the past decade. However, the economic growth in Malaysia has caused foreign direct investment (FDI) volatile in the market. The main objective of this research is to analyse the impact of FDI on Malaysia economic growth proxied by gross domestic product (GDP), foreign direct investment (FDI), gross fixed capital formation (DI), population growth (POP), and trade openness (TO). Analysis was done using Autoregressive Distributed Lag Model (ARDL) bound test approach with the period range of study was from 1970 until 2018. The study revealed that the chosen macroeconomics variables in the model contributed positively and significantly in increasing the growth of Malaysian economy. In terms of recommendations, there is a need for a policy change. The government ministry, primarily, the Ministry of International Trade and Industries (MITI), together with other government agencies such as Malaysia Investment Development Authority should formulate a strategy to upgrade the effectiveness of Malaysian tax policies and boost more business potential and attract investors from developed nations.
Highlights
Over the past half-century, Malaysia has experienced remarkable growth in the real gross domestic product (GDP) per capita
After running the result for each variable at first difference level it has found that all macroeconomics to be stationary at 1% significant level for both Augmented Dickey-Fuller (ADF) and Phillip Perron (PP) tests but except for population growth (LNPOP), which shows stationary at 5% significant level for trend and intercept on ADF only and for PP unit root test is non-significant level
Recommendation In the nutshell, the objective of this paper is to study the impact of selected macroeconomic variables on the real gross domestic product (GDP) in Malaysia with a focus on the foreign direct investment (FDI)
Summary
Over the past half-century, Malaysia has experienced remarkable growth in the real gross domestic product (GDP) per capita. GDP or economic growth is the most powerful instrument to improve the quality of life in developing countries likes Malaysia’s country. Economics growth can rise economy’s performance by adjusting market value of products and services over time. It is traditionally evaluated as the percentage of real gross domestic product or actual GDP. By the half of the 20th century, South-East Asian (SEA), including Malaysia, have experienced tiger economies and known as miracle economic growth. Malaysia’s economy has become one of the best economic performance in Asia starting from the year 1957 to 2005, real gross domestic product “GDP” had grown by an average of 6.5% per year
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Academic Research in Business and Social Sciences
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
