The determinants of foreign direct investment in Malaysia / Wan Mastura Wan Ismail and Zati Hidayah Zainol Abidin

Foreign Direct Investment is one of indicator of the country’s economic growth. The movements of FDI inflow are based on their determinants. Different countries will have different determinants that affect the movement of FDI inflow. The FDI inflow in Malaysia shows fluctuation from year 1980-2013 and this volatility attract the researcher’s attention to examine the determinants that affect the movements of Foreign Direct Investment (FDI) in Malaysia. Therefore, the purpose of this study is to examine the determinants that affect the movement of Foreign Direct Investment (FDI) in Malaysia by using annual data from the year 1980-2013. The multiple linear regressions are used in this study to assess the relationship between the dependent variable (FDI inflow) and independent variable (inflation rate, exchange rate, GDP growth, infrastructure, interest rate, and export). The result of this study shows that inflation rate and export are significantly related to the FDI.