Relationships of economic growth: evidence from Malaysia

This paper studies the relationship between several macroeconomic factors and economic growth in Malaysia from 1983 to 2013. The influencing factors examined are inflation, government expenditure, exports, and foreign direct investment. This study utilizes secondary data and employs the Ordinary Least Squares (OLS) method to analyze the relationship between economic growth and these factors. Overall, the findings indicate that not all factors have a significant relationship with economic growth. Of all the factors used, only foreign direct investment was found to have a significant relationship with economic growth, while inflation, government expenditure, and exports showed no significant relationship. The study concludes that foreign direct investment plays a more important role as a determinant of economic growth compared to the other variables.