Research Article Open Access

EXPORTS, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM MALAYSIA (1971-2013)

Muhammad Haseeb1, Nira Hariyatie Hartani2, Nor’ Aznin Abu Bakar1, Muhammad Azam1 and Sallahuddin Hassan1
  • 1 Department of Economics, School of Economics Finance and Banking, College of Business Universiti Utara Malaysia, Malaysia
  • 2 School of Government, COLGIS, Universiti Utara Malaysia, Malaysia

Abstract

The main objective of this study is to empirically investigate the relationship between exports, Foreign Direct Investment (FDI) and the economic growth in Malaysia. Records of annual time series data from the year 1971 till 2013 have been utilized for this purpose. Upon testing the data for stationarity, the Auto Regressive Distributed Lag (ARDL) model has been applied for the purpose of empirical investigation. The empirical results indicate that the productivity factor and externality effect of exports on the non-export sector are found to be statistically, positively significant, with the exports also having a positive impact on the economic growth and FDI of the country. The results support Exports Led Growth (ELG) and FDI-Led economic Growth (FLG) in Malaysia. The finding further suggests that Malaysia should continuous pursue exports promotion and a liberal investment economic policy in order to maintain and bolster overall economic growth.

American Journal of Applied Sciences
Volume 11 No. 6, 2014, 1010-1015

DOI: https://doi.org/10.3844/ajassp.2014.1010.1015

Submitted On: 5 January 2014 Published On: 15 April 2014

How to Cite: Haseeb, M., Hartani, N. H., Bakar, N. A. A., Azam, M. & Hassan, S. (2014). EXPORTS, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM MALAYSIA (1971-2013). American Journal of Applied Sciences, 11(6), 1010-1015. https://doi.org/10.3844/ajassp.2014.1010.1015

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Keywords

  • Exports
  • FDI
  • Economic Growth
  • ARDL
  • Malaysia