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Outward FDI and home country economic growth: a Malaysian case

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  • Koi Nyen Wong

Abstract

This paper attempts to explore the causality relationship between outward foreign direct investment (OFDI) and home country economic growth using Malaysia as a case. The main findings do not advocate the OFDI-led growth hypothesis. In order to promote OFDI-led growth, the home government should prepare the private sector for increasing competition in the era of globalization so that linkages can be forged with Malaysian multinationals, and to facilitate home sourcing for OFDI activities. However, the study reveals the evidence of growth-led OFDI, which conforms to the investment development path theory that can potentially internationalize business activities of Malaysian firms abroad.

Suggested Citation

  • Koi Nyen Wong, 2010. "Outward FDI and home country economic growth: a Malaysian case," Monash Economics Working Papers 56-10, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2010-56
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2010/5610outwardwong.pdf
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    References listed on IDEAS

    as
    1. de Mello, Luiz R, Jr, 1999. "Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 133-151, January.
    2. Luiz R. de Mello Jr., 1997. "Foreign Direct Investment in Developing Countries: A Selective Survey," Studies in Economics 9701, School of Economics, University of Kent.
    3. Bende-Nabende, A. & Ford, J. L., 1998. "FDI, Policy Adjustment and Endogenous Growth: Multiplier Effects from a Small Dynamic Model for Taiwan, 1959-1995," World Development, Elsevier, vol. 26(7), pages 1315-1330, July.
    4. Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(1), pages 1-34.
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    Cited by:

    1. Goh, Soo Khoon & Wong, Koi Nyen & Tham, Siew Yean, 2012. "Does Outward FDI Matter in International Trade? Evidence from Malaysia," MPRA Paper 39715, University Library of Munich, Germany.
    2. Ciesielska, Dorota & Kołtuniak, Marcin, 2017. "Outward foreign direct investments and home country’s economic growth," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 482(C), pages 127-146.

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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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