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- Title
Impact of Foreign Direct Investment & Domestic Investment on Economic Growth of Malaysia.
- Authors
Mohamed, Masoud Rashid; Jit Singh, Keshminder Singh; Chung-Yee Liew
- Abstract
In this paper, we apply vector error correction modeling (VECM) to 1970-2008 data. The objective is to analyse the long-run causal relationship between foreign direct investment (FDI), domestic investment (DI) and economic growth in Malaysia. The presence of complementary/substitution effect between FDI and DI is also investigated using impulse response function and variance decomposition analysis. The results suggest a long-run bilateral causality between economic growth and DI. There is no evidence of causality between FDI and economic growth. On the other hand, the results suggest a short-run crowding-in effect between FDI and DI.
- Subjects
MALAYSIA; VECTOR error-correction models; DATA; FOREIGN investments; INVESTMENTS; ECONOMIC development; IMPULSE response; ANALYSIS of variance; BILATERAL &; Multinational Economic Co-Operation in West Africa (Book); CROWDING stress
- Publication
Malaysian Journal of Economic Studies, 2013, Vol 50, Issue 1, p21
- ISSN
1511-4554
- Publication type
Article