Financial development and the FDI-growth nexus: the Malaysian experience
AbstractThis article examines the FDI-growth nexus in the small open economy of Malaysia by controlling for the level of financial development. Financial development is proxied by a composite index, which is a summary measure of four financial development indicators. Using time-series data from 1965 to 2004, the results show that FDI and financial development are positively related to output in the long-run. The impact of FDI on output is enhanced through financial development. To supplement these findings, we assess the causal relationships between the variables using the recent causality tests available in the literature. The results indicate that economic growth causes FDI growth in the long-run, but no feedback relationship is observed.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 41 (2009)
Issue (Month): 13 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Anwar, Sajid & Sun, Sizhong, 2011. "Financial development, foreign investment and economic growth in Malaysia," Journal of Asian Economics, Elsevier, vol. 22(4), pages 335-342, August.
- Temiz, Dilek & Gökmen, Aytaç, 2014. "FDI inflow as an international business operation by MNCs and economic growth: An empirical study on Turkey," International Business Review, Elsevier, vol. 23(1), pages 145-154.
- James B. Ang, 2007.
"Are Financial Sector Policies Effective in Deeping the Malaysian Financial System,"
DEGIT Conference Papers
c012_031, DEGIT, Dynamics, Economic Growth, and International Trade.
- James B. Ang, 2008. "Are Financial Sector Policies Effective In Deepening The Malaysian Financial System?," Contemporary Economic Policy, Western Economic Association International, vol. 26(4), pages 623-635, October.
- James B. Ang, 2007. "Are Financial Sector Policies Effective In Deepening The Malaysian Financial System?," Monash Economics Working Papers 02-07, Monash University, Department of Economics.
- Muhammad, Shahbaz & Nuno, Carlos Leitão & Summaira, Malik, 2011.
"Foreign direct investment-economic growth nexus: The role of domestic financial development in Portugal,"
34226, University Library of Munich, Germany, revised 20 Oct 2011.
- Muhammad Shahbaz & Nuno Carlos leitão & Summaira Malik, 2011. "Foreign Direct Investment-Economic Growth Nexus: The Role of Domestic Financial Development in Portugal," Economics Bulletin, AccessEcon, vol. 31(4), pages 2824-2838.
- Muhammad, Shahbaz & mohammad, Mafizur Rahman, 2011. "The dynamic of financial development, imports, foreign direct investment and economic growth: cointegration and causality analysis in Pakistan," MPRA Paper 32181, University Library of Munich, Germany, revised 12 Jul 2011.
- Abdul Karim, Zulkefly & Zaidi, Mohd Azlan Shah & Ismail, Mohd Adib & Abdul Karim, Bakri, 2011. "Institutions and foreign direct investment (FDI) in Malaysia: empirical evidence using ARDL model," MPRA Paper 31899, University Library of Munich, Germany.
- James B. Ang, 2007.
"A Survey Of Recent Developments In The Literature Of Finance And Growth,"
Monash Economics Working Papers
03-07, Monash University, Department of Economics.
- James B. Ang, 2008. "A Survey Of Recent Developments In The Literature Of Finance And Growth," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 536-576, 07.
- James Ang, 2009. "Foreign direct investment and its impact on the Thai economy: the role of financial development," Journal of Economics and Finance, Springer, vol. 33(3), pages 316-323, July.
- Tang, Chor Foon & Shahbaz, Muhammad & Arouri, Mohamed, 2013. "Re-investigating the electricity consumption and economic growth nexus in Portugal," Energy Policy, Elsevier, vol. 62(C), pages 1515-1524.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.