IDEAS home Printed from https://ideas.repec.org/a/wsi/serxxx/v60y2015i02ns0217590815500113.html
   My bibliography  Save this article

The Relative Contributions Of Domestic And Foreign Direct Investments And Exports To Malaysia'S Economic Growth

Author

Listed:
  • CHOR FOON TANG

    (Centre for Policy Research and International Studies, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia)

  • EU CHYE TAN

    (Department of Economics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia)

Abstract

The objective of this study is to assess the roles of domestic direct investment, foreign direct investment and exports as catalysts of Malaysia's economic growth using cointegration and Granger causality test techniques. To address the dynamics in the growth relationships, the study also performs time-varying regression and variance decomposition analyses. It covers the quarterly sample period from 1991:Q1 to 2010:Q2. The econometric results suggest that all the three variables have a positive impact on economic growth and thus are catalytic to economic growth. However, the growth effect of domestic direct investment is more stable than that of the other two growth determinants. Contrary to earlier empirical studies, the variance decomposition analysis herein reveals that domestic direct investment is the most important determinant of growth in the long-run (L-R) compared to exports and foreign direct investment.

Suggested Citation

  • Chor Foon Tang & Eu Chye Tan, 2015. "The Relative Contributions Of Domestic And Foreign Direct Investments And Exports To Malaysia'S Economic Growth," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 60(02), pages 1-20.
    • Handle: RePEc:wsi:serxxx:v:60:y:2015:i:02:n:s0217590815500113
    DOI: 10.1142/S0217590815500113
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0217590815500113
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0217590815500113?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bakari, Sayef, 2018. "The Impact of Domestic Investment on Economic Growth New Policy Analysis from Algeria," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 3(1), pages 35-51, March.
    2. Tang, Chor Foon & Abosedra, Salah, 2019. "Logistics performance, exports, and growth: Evidence from Asian economies," Research in Transportation Economics, Elsevier, vol. 78(C).
    3. Sayef Bakari & Nissar Fakraoui & Sofien Tiba, 2021. "Domestic Investment, Export, Import And Economic Growth In Brazil: An Application Of Vector Error Correction Model," Journal of Smart Economic Growth, , vol. 6(1), pages 31-48, Mars.
    4. Azka Amin & Sofia Anwar & Xi‐Hua Liu, 2022. "Outward foreign direct investment and economic growth in Romania: Evidence from non‐linear ARDL approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 665-677, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Karasoy, Alper, 2022. "Is innovative technology a solution to Japan's long-run energy insecurity? Dynamic evidence from the linear and nonlinear methods," Technology in Society, Elsevier, vol. 70(C).
    2. Bloch, Harry & Rafiq, Shuddhasattwa & Salim, Ruhul, 2015. "Economic growth with coal, oil and renewable energy consumption in China: Prospects for fuel substitution," Economic Modelling, Elsevier, vol. 44(C), pages 104-115.
    3. Noraida, A.W. & Abdul-Rahim, A.S. & Othman, Mohd, 2017. "The Impact of Sustainable Forest Management (SFM) Practices on Primary Timber-Based Production in Peninsular Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 51(2), pages 143-154.
    4. Georgios Bertsatos & Plutarchos Sakellaris & Mike G. Tsionas, 2022. "Extensions of the Pesaran, Shin and Smith (2001) bounds testing procedure," Empirical Economics, Springer, vol. 62(2), pages 605-634, February.
    5. Muhammad Shafiullah & Ravinthirakumaran Navaratnam, 2016. "Do Bangladesh and Sri Lanka Enjoy Export-Led Growth? A Comparison of Two Small South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 114-132, March.
    6. Ziramba, Emmanuel, 2008. "The demand for residential electricity in South Africa," Energy Policy, Elsevier, vol. 36(9), pages 3460-3466, September.
    7. Jikun Jiang & Shenglai Zhu & Weihao Wang, 2022. "Carbon Emissions, Economic Growth, Urbanization, and Foreign Trade in China: Empirical Evidence from ARDL Models," Sustainability, MDPI, vol. 14(15), pages 1-15, August.
    8. Andrés, Antonio R. & Halicioglu, Ferda, 2010. "Determinants of suicides in Denmark: Evidence from time series data," Health Policy, Elsevier, vol. 98(2-3), pages 263-269, December.
    9. Nikeel Kumar & Ronald Ravinesh Kumar & Radika Kumar & Peter Josef Stauvermann, 2020. "Is the tourism–growth relationship asymmetric in the Cook Islands? Evidence from NARDL cointegration and causality tests," Tourism Economics, , vol. 26(4), pages 658-681, June.
    10. T.K. Jayaraman & Chee-Keong Choong & Pravinesh Chand, 2016. "Do Foreign Aid And Remittance Inflows Hurt Competitiveness Of Exports Of Pacific Island Countries? An Empirical Study Of Fiji," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(2), pages 111-125, June.
    11. Ulrich Witt & Christian Gross, 2020. "The rise of the “service economy” in the second half of the twentieth century and its energetic contingencies," Journal of Evolutionary Economics, Springer, vol. 30(2), pages 231-246, April.
    12. Hande Aksöz Yılmaz, 2020. "The Impact of Foreign Trade on Immigration from Turkey to Germany: ARDL Bounds Test Approach," Journal of Economy Culture and Society, Istanbul University, Faculty of Economics, vol. 62(62), pages 123-143, December.
    13. Kumar, Nikeel Nishkar & Patel, Arvind, 2023. "Nonlinear effect of air travel tourism demand on economic growth in Fiji," Journal of Air Transport Management, Elsevier, vol. 109(C).
    14. Sinha, Avik & Shahbaz, Muhammad, 2018. "Estimation of Environmental Kuznets Curve for CO2 emission: Role of renewable energy generation in India," Renewable Energy, Elsevier, vol. 119(C), pages 703-711.
    15. Gerard Bikorimana & Charles Rutikanga & Didier Mwizerwa, 2020. "Linking energy consumption with economic growth: Rwanda as a case study," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2020(2), pages 181-200.
    16. Marcus Box & Karl Gratzer & Xiang Lin, 2020. "Destructive entrepreneurship in the small business sector: bankruptcy fraud in Sweden, 1830–2010," Small Business Economics, Springer, vol. 54(2), pages 437-457, February.
    17. Chirwa, Themba G. & Odhiambo, Nicholas M., 2016. "What Drives Long-Run Economic Growth? Empirical Evidence from South Africa," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(4), pages 429-456.
    18. C. Seri & A. de Juan Fernandez, 2021. "The relationship between economic growth and environment. Testing the EKC hypothesis for Latin American countries," Papers 2105.11405, arXiv.org.
    19. Muhammad Shahbaz & Mita Bhattacharya & Mantu Kumar Mahalik, 2017. "Finance and income inequality in Kazakhstan: evidence since transition with policy suggestions," Applied Economics, Taylor & Francis Journals, vol. 49(52), pages 5337-5351, November.
    20. Kanjilal, Kakali & Ghosh, Sajal, 2013. "Environmental Kuznet’s curve for India: Evidence from tests for cointegration with unknown structuralbreaks," Energy Policy, Elsevier, vol. 56(C), pages 509-515.

    More about this item

    Keywords

    Catalysts of growth; domestic direct investment; exports; FDI; Malaysia; stability; C22; E22; O16; O53;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:serxxx:v:60:y:2015:i:02:n:s0217590815500113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/ser/ser.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.