The determinants of Foreign Direct Investment (FDI): Malaysian evidence / Nor Zulaikha Zulkifli

This study is primarily interested in examining the determinants that impacted the FDI in Malaysia from 2011 to 2020. A specific question that is addressed in this study is whether the determinants of FDI contribute to the impact of FDI in Malaysia. Hence, the independent variables that are chosen in this study are government expenditure, unemployment rate, exports, corruption perception index and global peace index. This paper utilized the Ordinary Least Squares (OLS) regression method in determining the significance of the independent variables in causing FDI. The correlation test, normality test and multicollinearity test were also employed in order to discover the properties of data collected from The World Bank, Knoema and Thomson Reuters DataStream. The results identified government expenditure and global peace shows positive and insignificant, meanwhile unemployment rate, exports and corruption perception show negative and insignificant relationship towards FDI. Thus, some recommendations suggest to future researchers which are using ARDL test to see long cointegration relationship between dependent and independent variables.