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Empirical Analysis of the Relationships between inward FDI and Business Cycles in Malaysia

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  • Manal Omer
  • Liu Yao

Abstract

Globalization has been spreading macro economic effects around the world as well as fueling firms’ cross-national activities. Are there any links between these two influences? This paper chose Malaysia as subject and examined the causal relationships between inward foreign direct investment (FDI) and business cycles. A set of models based on Granger Causality test and VAR Impulse Responses were constructed. Time-series data covered from 1970 to 2008. And the findings clearly indicated that in the case of Malaysia, there is evidence of bi-directional causality and long-run relationships between firms’ (foreign) activities (inward FDI) and business cycle developments in a long term.

Suggested Citation

  • Manal Omer & Liu Yao, 2011. "Empirical Analysis of the Relationships between inward FDI and Business Cycles in Malaysia," Modern Applied Science, Canadian Center of Science and Education, vol. 5(3), pages 157-157, June.
    • Handle: RePEc:ibn:masjnl:v:5:y:2011:i:3:p:157
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    References listed on IDEAS

    as
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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