Foreign direct investment and economic development relationship: an empirical study on Malaysia / Ezzati Shahida Shamsul Liza

Foreign direct investment (FDI) has been an important factor in economic development for Malaysia. It generates economic by increasing capital formation through the expansion of production capacity, promotion of export growth, and creation of employment in Malaysia. However, behind the rapid expansion of the Malaysian economy, the shortage of capital for future development is crucial and needs to be investigated. Thus, this study provides shred Of empirical evidence on the relationship between FDI and Malaysia's development for the period of 1970 to 2020. Three (3) independent variables have been identified as proxies of the Malaysia development such as the infrastructure, market size, and exchange rate. Data of this study is derived from various sources such as World Data Bank and Investing.com and examined using the Ordinary Least Square (OLS) method. Results of the study revealed that infrastructure and market size have significant relationship with FDI while exchange rate has insignificant relationship with FDI.