Importance of government expenditure, foreign direct investment and inflation rate towards economic growth / Dura Akilah Bidin

This study was attempt to identify the relationship between government expenditure, foreign direct investment and inflation rate with economic growth and to see what the most important factor that contribute towards economic growth. To prove this study, researcher collects data for government expenditure, foreign direct investment and inflation rate in DataStream, Ministry of Finance (MOF), Department of Statistic Malaysia and Malaysian Industrial Development Authority (MIDA) from 1991 until 2010 and test by using SPSS program (STATISTICAL PACKAGE FOR THE SOCIAL SCIENCE) to analyze this research to find the best result. This study was being tested using multiple regression technique, correlations analysis, coefficient of determination, standard error of coefficient (t-test), p-value analysis, analysis of variance (F-test), Eigen values analysis, Tolerance and Variance Inflation Factor (VIF) and Durbin Watson test. The finding shows that government expenditure and foreign direct investment was significant result and these were consistent with the economic growth. From the finding also, it shows that the inflation rate is not really related with economic growth. Therefore, the researcher makes suggestion to future researcher to increase the number sample of data and use the other variables to ensure get accurate findings and bias free.