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FDI and Economic Growth in Malaysia

Karimi, Mohammad Sharif and Yusop, Zulkornain (2009): FDI and Economic Growth in Malaysia. Forthcoming in: Asian-African Journal of Economics and Econometrics

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Abstract

Abstract: This study examines the causal relationship between foreign direct investment and economic growth. Methodology is based on the Toda-Yamamoto test for causality relationship and the bounds testing (ARDL). Time-series data covering the period 1970-2005 for Malaysia, the study found, in the case of Malaysia there is no strong evidence of a bi-directional causality and long-run relationship between FDI and economic growth. This suggests that FDI has indirect effect on economic growth in Malaysia

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