The relationship between trade openness, foreign direct investment and growth: Case of Malaysia
AbstractThis study examines the role of trade openness and foreign direct investment in influencing economic growth in Malaysia during 1975-2005, using the Bounds testing approach suggested by Pesaran et al. (2001). The empirical results demonstrate that trade openness is positively associated and statistically significant determinant of growth, both in short run and the long run. The result also suggested that foreign direct investment is positively associated in the short run and negatively associated in the long run, both significantly. Besides these two variables, the other control variable namely exchange rate is also significant in the short run as well as in the long run.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 11928.
Date of creation: 17 Oct 2008
Date of revision:
trade openness; foreign direct investment; economic growth; Malaysia;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-07 (All new papers)
- NEP-FDG-2008-12-07 (Financial Development & Growth)
- NEP-INT-2008-12-07 (International Trade)
- NEP-OPM-2008-12-07 (Open Economy Macroeconomic)
- NEP-SEA-2008-12-07 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mahadevan, Renuka & Suardi, Sandy, 2008. "A dynamic analysis of the impact of uncertainty on import- and/or export-led growth: The experience of Japan and the Asian Tigers," Japan and the World Economy, Elsevier, vol. 20(2), pages 155-174, March.
- Joshua J. Lewer & Hendrik Van den Berg, 2003. "How Large Is International Trade's Effect on Economic Growth?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 363-396, 07.
- Khaing, Khaing Sape Saw, 2007. "Globalization and Change of Investment Environment in ASEAN," MPRA Paper 42003, University Library of Munich, Germany.
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