The effects of labor market institutions on FDI inflows in manufacturing sector in Malaysia / Nazhatul Izzati Khairuddin

The central theme of this paper discusses The Effects of Labor Market Institutions on FDI Inflows in Manufacturing Sector in Malaysia. The prime objective of this paper is to ascertain the relationship between salaries and wages and FDI inflows in manufacturing sector and to ascertain the relationship between an employment and FDI inflows in manufacturing sector. The theoretical framework has been further explained in this paper. The discussions of the theoretical framework are based on the variables of the FDI inflows in manufacturing sector, employment, salaries and wages. All data are gathered from MIDA’s Statistics Department and Department of Statistics library and this study is conducted starting from year 1980 until 2005 in yearly basis. From the findings, the result shows that employment has a positive significant relationship with FDI inflows in manufacturing sector in Malaysia. Whereas, salaries and wages has no significant relationship with FDI inflows in manufacturing sector in Malaysia. In overall, this result shows that between two indicators of labor market, employment has an impact on FDI inflows in manufacturing sector in Malaysia.