The Influence of Inflation Level, Exchange Rate and Gross Domestic Product on Foreign Direct Investment in the ASEAN Countries on 2007 - 2018 (original) (raw)
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Corresponding Author: Impact of GDP and Exchange Rate on Foreign Direct Investment in Malaysia
FDI (Foreign direct investment) has performed an important part in the economic growth and development of several nations in recent decades. FDI is still crucial, especially for developing economies. This is critical to developing countries with limited ability to raise private capital. FDI has performed a very significant role in Malaysia's economy in creating economic growth by expanding domestic capital formation. A key component in the global economy is exchange rate movements, which determines the distribution of international resources and also affects the profitability of daily international transactions. In this study the main objective is to evaluate: (I) Identifying economic growth's impact on FDI in Malaysia as a whole. (II) Identifying exchange rate's impact on FDI in Malaysia as a whole. (III) Identifying economic financial sector's impact on FDI. (IV) Identifying economic Manufacturing sector's impact on FDI. In order to fulfill this purpose the data between 1991 up to 2012 was collected from UNCTAD and MULTIMEDIA online data bases they were analyzed through mediation regression analysis from study's result it is identified that there is not positively related between FDI and GDP and FDI is positively related to exchange rate and there is not a positive relationship between FDI and GDP of financial sector and also there is positive relationship between FDI and GDP of manufacturing sector. The researcher is aware that GDP of manufacturing sector and exchange rate have contributed significantly to the Malaysian Foreign Direct Investment, however, it should not be overstated that the importance of GDP and GDP of the financial sector did not have a statistically positive relation to FDI.