Open AccessInvestment and Economic Indicators in Malaysia
Author(s) -
Masturah Ma’in,
Norfaiezah Nordin,
Izza Hazira Zailan,
Saliza Sulaiman,
Zuraidah Ismail
Publication year - 2018
Publication title -
journal of international business, economics and entrepreneurship
Language(s) - English
Resource type - Journals
ISSN - 2550-1429
DOI - 10.24191/jibe.v3i2.14429
Subject(s) - openness to experience , error correction model , economics , unit root test , unit root , investment (military) , foreign direct investment , johansen test , order (exchange) , cointegration , empirical research , econometrics , government (linguistics) , short run , test (biology) , population , macroeconomics , statistics , finance , mathematics , philosophy , law , linguistics , sociology , biology , psychology , social psychology , paleontology , political science , demography , politics
This study is to investigate the relationship between economic indicators and investment in Malaysia using secondary data spanned through 1982-2015. This study employs an empirical analysis by adapting the unit root test, Johansen co-integration test and vector error correction model (VECM) to determine the short-run and long run effect among variables. The cointegrating test indicates that investment is significantly related to the trade openness, GDP and population. Based on the VECM results, the findings show that a long run relationship exists between the trade openness and investment in Malaysia. Hence, these reveal that it is important for the Malaysian government to enhance the economic policy in liberalizing foreign trade in order to encourage more investments.