Determinants influencing foreign direct investment in Malaysia / Warddatul Amani Ahmad Zulkafli

The paper investigates the determinants of foreign direct investment (FDI) in Malaysia, the
strong growth performances experienced by Malaysia economy greatly on the FDI. FDI
inflows enhance economic growth by increasing capital formation through the expansion
of production capacity, promotion of export growth and creation of employment in
Malaysia. FDI inflows of Malaysia started fluctuating from 1996 to 2010 and this high
volatility of Malaysia FDI inflows drew the researchers to examine the factors affecting
FDI inflows in Malaysia by using the annual data from year 1988–2017. Multiple linear
regressions model is applied to study the relationship between explanatory variables (gross
domestic product, populations growth, and trade openness) and explained variable
(Malaysia FDI inflow). Empirical results show that gross domestic product and populations
growth are significant in determining MFDI. Conversely, trade openness is insignificant in
determining MFDI.