How China FDI affects Malaysia Export Performance


Tee, Chee Lip and Ng, Kar Yee and Law, Chee Hung (2019) How China FDI affects Malaysia Export Performance. International Journal of China Studies How China’s FDI Affects, 12 (1). pp. 115-131.

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FDI inflows in Malaysia is increasing over the past decades with the changing of source country. FDI from China in Malaysia is very limited previously but increased significantly in recent years and now the largest contributor. Although FDI inflows is link with export performance – a channel where FDI promote growth, limited empirical evidence presented in literature regarding the impact of the changing FDI source in Malaysian economy. Using quarter data between Q1:2010 and Q1:2018, this paper estimates the link between FDI and export performance in Malaysia. In addition to examine the impact from total FDI, this paper disaggregates the FDI by studying the impact of FDI sourced from China towards Malaysia export activity. The empirical results, based on autoregressive distributed lag approach, reveal that both total and China FDI help in promoting the Malaysia export activity. Nevertheless, China FDI does not contribute towards the export of machinery and equipment but the export of non-machinery and equipment. This indicates that China FDI has limited contribution on the export activity of greater technology component, which crucial in long run growth through promoting the technology advancement.

Item Type: Article
Uncontrolled Keywords: Export; Foreign direct investment; Malaysia; China; ARDL
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Management (FOM)
Depositing User: Ms Rosnani Abd Wahab
Date Deposited: 01 Nov 2021 02:22
Last Modified: 01 Nov 2021 02:22


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