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The Impact of FDI Inflows and ICT Development towards Economic Growth: Evidence for China and Malaysia

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  • Muhammad Aiman Haziq Norehan
  • Abdul Rahim Ridzuan
  • Shafinar Ismail
  • Mohamad Idham Md Razak
  • Mohd Shahidan Shaari

Abstract

This paper examines whether there is a long-run relationship between foreign direct investment (FDI) inflows, ICT development and economic growth in China and Malaysia. We use a newly developed cointegration test, the autoregressive distributed lag (ARDL), to examine this long-run relationship by employing annual data from 1980 to 2017. The study results show that ICT has a positive relationship with economic growth in China while negative in Malaysia. Capital and labour were found significantly influence economic growth in China and Malaysia. FDI inflows and human capital failed to influence economic growth in China, but human capital significantly influenced Malaysia. The findings are important for formulating policies by recommending mandatory policies related to FDI inflows, human capital and labour to achieve long-term and sustainable development in China and Malaysia.

Suggested Citation

  • Muhammad Aiman Haziq Norehan & Abdul Rahim Ridzuan & Shafinar Ismail & Mohamad Idham Md Razak & Mohd Shahidan Shaari, 2022. "The Impact of FDI Inflows and ICT Development towards Economic Growth: Evidence for China and Malaysia," Business and Economic Research, Macrothink Institute, vol. 12(3), pages 43-55, December.
    • Handle: RePEc:mth:ber888:v:12:y:2022:i:3:p:43-55
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    References listed on IDEAS

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    1. Lipsey, Robert E. & Sjöholm, Fredrik, 2010. "FDI and Growth in East Asia: Lessons for Indonesia," Working Paper Series 852, Research Institute of Industrial Economics.
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    Cited by:

    1. Mohd Ikbal Mohd Huda & Abdul Rahim Ridzuan & Mohd Ikhram Mohd Ridzuan & Marfunizah Madan, 2022. "Analysis of Sustainable Development Progress in the State of Sabah, Malaysia," Business and Economic Research, Macrothink Institute, vol. 12(4), pages 96-107, December.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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