A Re-Examination of the Role of Foreign Direct Investment and Exports in Malaysia’s Economic Growth: A Time Series Analysis, 1970-2006
The main objective of this study was to re-examine the role of foreign direct investment (FDI) and exports in Malaysia’s economic growth over the period of 1970 to 2006. The Johansen and Juselius (1990) cointegration test was used to investigate the presence of a long-run equilibrium relationship...
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| Format: | Article |
| Language: | English |
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UUM Press
2008-09-01
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| Series: | International Journal of Management Studies |
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| Online Access: | https://e-journal.uum.edu.my/index.php/ijms/article/view/9854 |
| _version_ | 1797943179570315264 |
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| author | Tang Chor Foon |
| author_facet | Tang Chor Foon |
| author_sort | Tang Chor Foon |
| collection | DOAJ |
| description | The main objective of this study was to re-examine the role of foreign direct investment (FDI) and exports in Malaysia’s economic growth over the period of 1970 to 2006. The Johansen and Juselius (1990) cointegration test was used to investigate the presence of a long-run equilibrium relationship between economic growth and its determinants. Besides, the vector errorcorrection model (VECM) and the Granger (1969) causality test were used to examine the short-and long-run causality direction between the relevant variables. The empirical results revealed that economic growth and its determinants were cointegrated. The Dynamic OLS results suggested that FDI and exports were positively related to economic growth. In addition, the Granger causality results strongly supported bilateral causality between economic growth and its determinants. This indicated that FDI and exports contribute to Malaysia’s economic growth. In fact, high economic growth will also cause FDI and export-orientated industries to grow rapidly.
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| first_indexed | 2024-04-10T20:19:06Z |
| format | Article |
| id | doaj.art-a1271ccc97de4b50b6c81309d50b367f |
| institution | Directory Open Access Journal |
| issn | 2232-1608 2180-2467 |
| language | English |
| last_indexed | 2024-04-10T20:19:06Z |
| publishDate | 2008-09-01 |
| publisher | UUM Press |
| record_format | Article |
| series | International Journal of Management Studies |
| spelling | doaj.art-a1271ccc97de4b50b6c81309d50b367f2023-01-26T03:14:06ZengUUM PressInternational Journal of Management Studies2232-16082180-24672008-09-0115A Re-Examination of the Role of Foreign Direct Investment and Exports in Malaysia’s Economic Growth: A Time Series Analysis, 1970-2006Tang Chor Foon0College of Arts and Sciences Universiti Utara MalaysiaThe main objective of this study was to re-examine the role of foreign direct investment (FDI) and exports in Malaysia’s economic growth over the period of 1970 to 2006. The Johansen and Juselius (1990) cointegration test was used to investigate the presence of a long-run equilibrium relationship between economic growth and its determinants. Besides, the vector errorcorrection model (VECM) and the Granger (1969) causality test were used to examine the short-and long-run causality direction between the relevant variables. The empirical results revealed that economic growth and its determinants were cointegrated. The Dynamic OLS results suggested that FDI and exports were positively related to economic growth. In addition, the Granger causality results strongly supported bilateral causality between economic growth and its determinants. This indicated that FDI and exports contribute to Malaysia’s economic growth. In fact, high economic growth will also cause FDI and export-orientated industries to grow rapidly. https://e-journal.uum.edu.my/index.php/ijms/article/view/9854CausalityCointegrationExport-led growthFDI-led growth |
| spellingShingle | Tang Chor Foon A Re-Examination of the Role of Foreign Direct Investment and Exports in Malaysia’s Economic Growth: A Time Series Analysis, 1970-2006 International Journal of Management Studies Causality Cointegration Export-led growth FDI-led growth |
| title | A Re-Examination of the Role of Foreign Direct Investment and Exports in Malaysia’s Economic Growth: A Time Series Analysis, 1970-2006 |
| title_full | A Re-Examination of the Role of Foreign Direct Investment and Exports in Malaysia’s Economic Growth: A Time Series Analysis, 1970-2006 |
| title_fullStr | A Re-Examination of the Role of Foreign Direct Investment and Exports in Malaysia’s Economic Growth: A Time Series Analysis, 1970-2006 |
| title_full_unstemmed | A Re-Examination of the Role of Foreign Direct Investment and Exports in Malaysia’s Economic Growth: A Time Series Analysis, 1970-2006 |
| title_short | A Re-Examination of the Role of Foreign Direct Investment and Exports in Malaysia’s Economic Growth: A Time Series Analysis, 1970-2006 |
| title_sort | re examination of the role of foreign direct investment and exports in malaysiaa€™s economic growth a time series analysis 1970 2006 |
| topic | Causality Cointegration Export-led growth FDI-led growth |
| url | https://e-journal.uum.edu.my/index.php/ijms/article/view/9854 |
| work_keys_str_mv | AT tangchorfoon areexaminationoftheroleofforeigndirectinvestmentandexportsinmalaysiaaseconomicgrowthatimeseriesanalysis19702006 AT tangchorfoon reexaminationoftheroleofforeigndirectinvestmentandexportsinmalaysiaaseconomicgrowthatimeseriesanalysis19702006 |