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

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

• Item Type: MPRA Paper
• Language: English
• Keywords: Foreign direct investment, Toda-Yamamoto test, bounds testing (ARDL), economic growth. Malaysia
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies

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