Factors affecting foreign direct investment inflows towards economic growth in Malaysia / Liya Fitrya Nin

Foreign Direct Investment (FDI) has been a significant source of economic development for Malaysia, bringing in the necessary capital, technology and knowledge. In recent years, Malaysia has only been successful in attracting a small number of foreign investors. Therefore, the main objective of this paper is to investigate the main factors that attracts FDI inflows into Malaysia from 1990 to 2020. The study examines the relationships between FDI and the proposed explanatory variables, namely market size (GDP), trade openness (OPN), inflation rate (INF), and infrastructure (INFRA) that are expected to determine FDI inflows into Malaysia using multiple regression analysis represented by ordinary least square (OLS). The correlation, multicollinearity, and heteroskedasticity are also employed in order to discover the properties of data primarily collected mainly from the World Bank Data. The results indicated that GDP and INFRA are positively affected the FDI inflows while OPN and INFRA are not determinant in affecting FDI inflows towards economic growth in Malaysia.