The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries

Foreign direct investment (FDI) is an investment which involves a long-term alliance and represents a long influential effect by the resident in a single economy. FDI stimulates economic stability and development of a country. The objective of this study is to examine the relationship between macroe...

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Main Author:	Naqiuddin Naqib, Mohamad Khairi
Format:	Thesis
Language:	eng eng
Published:	2020
Subjects:	HG Finance HJ Public Finance
Online Access:	https://etd.uum.edu.my/10401/1/grant%20the%20permission_s826113.pdf https://etd.uum.edu.my/10401/2/s826113_01.pdf
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id	my-uum-etd.10401
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spelling	my-uum-etd.104012023-03-09T01:27:58Z The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries 2020 Naqiuddin Naqib, Mohamad Khairi Abdul Razak, Nor Azam School of Economics, Finance & Banking School of Economics, Finance & Banking HG Finance HJ Public Finance Foreign direct investment (FDI) is an investment which involves a long-term alliance and represents a long influential effect by the resident in a single economy. FDI stimulates economic stability and development of a country. The objective of this study is to examine the relationship between macroeconomic variables and FDI inflows in ASEAN-5 countries over the period 1988-2018. The dependent variable is FDI inflows whereas as the independent variables are economic growth, exchange rate, interest rate, inflation and trade openness. Findings from the panel unit root test reveals that all variables are stationary at 1% significance level. Based on the cointegration test, all variables are cointegrated and has a long run relationship among the variables. From the FMOLS method, this study finds that there is a negative and significant relationship between interest rate and FDI inflow. This implies that an increase in interest rate discourages foreign investment into the country. Also, there is a positive and significant relationship between trade openness and FDI inflow. Thus, an increase in trade openness attracts FDI inflows into the country. Furthermore, this study discovers that economic growth, exchange rate and inflation are not statistically significant in influencing FDI inflows in ASEAN-5 countries. Therefore, this study will provide assistance for policy makers in improving the current strategy and policies on FDI inflow 2020 Thesis https://etd.uum.edu.my/10401/ https://etd.uum.edu.my/10401/1/grant%20the%20permission_s826113.pdf text eng staffonly https://etd.uum.edu.my/10401/2/s826113_01.pdf text eng public other masters Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Abdul Razak, Nor Azam
topic	HG Finance HJ Public Finance
spellingShingle	HG Finance HJ Public Finance Naqiuddin Naqib, Mohamad Khairi The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries
description	Foreign direct investment (FDI) is an investment which involves a long-term alliance and represents a long influential effect by the resident in a single economy. FDI stimulates economic stability and development of a country. The objective of this study is to examine the relationship between macroeconomic variables and FDI inflows in ASEAN-5 countries over the period 1988-2018. The dependent variable is FDI inflows whereas as the independent variables are economic growth, exchange rate, interest rate, inflation and trade openness. Findings from the panel unit root test reveals that all variables are stationary at 1% significance level. Based on the cointegration test, all variables are cointegrated and has a long run relationship among the variables. From the FMOLS method, this study finds that there is a negative and significant relationship between interest rate and FDI inflow. This implies that an increase in interest rate discourages foreign investment into the country. Also, there is a positive and significant relationship between trade openness and FDI inflow. Thus, an increase in trade openness attracts FDI inflows into the country. Furthermore, this study discovers that economic growth, exchange rate and inflation are not statistically significant in influencing FDI inflows in ASEAN-5 countries. Therefore, this study will provide assistance for policy makers in improving the current strategy and policies on FDI inflow
format	Thesis
qualification_name	other
qualification_level	Master's degree
author	Naqiuddin Naqib, Mohamad Khairi
author_facet	Naqiuddin Naqib, Mohamad Khairi
author_sort	Naqiuddin Naqib, Mohamad Khairi
title	The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries
title_short	The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries
title_full	The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries
title_fullStr	The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries
title_full_unstemmed	The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries
title_sort	relationship between macroeconomic variables and foreign direct investment: evidence from asean-5 countries
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2020
url	https://etd.uum.edu.my/10401/1/grant%20the%20permission_s826113.pdf https://etd.uum.edu.my/10401/2/s826113_01.pdf
_version_	1776103808881917952

The relationship between macroeconomic variables and foreign direct investment: Evidence from asean-5 countries

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