The Role of Foreign Direct Investment Inflows in Economic Growth in Malaysia
DOI:
https://doi.org/10.33736/tur.3688.2021Keywords:
Economic Growth, FDI inflows, Granger Causality Test, Ordinary Least Square Regression, Unit Root TestAbstract
The purpose of this study is to investigate the relationship between the inflows of Foreign Direct Investment (FDI) and economic growth in Malaysia. The sample collected for this empirical study covered 30 years of data from 1991 to 2020. The secondary data was collected annually and a total of 30 observations were taken for each variable. Ordinary Least Square (OLS) regression, unit root test, several diagnostic tests and Granger causality test were used in this research to investigate the relationship between FDI inflows and economic growth. Eviews 11 was used to analyze the time series data throughout all the tests. The result showed that the inflows of FDI has a significant negative relationship with economic growth and there is no causal relationship between FDI and Gross Domestic Product (GDP).
Keywords: Economic growth, FDI inflows, Granger Causality Test, Ordinary Least Square regression, Unit Root Test
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