Measuring and analyzing the impact of the official exchange rate, the real interest rate, and the inflation rate on foreign direct investment coming into Malaysia for the period (1990-2020)
Year: 2025
Type: article
Abstract: The goal of the study is to explain the significance of macroeconomic factors, such as the real interest rate, inflation, and the official exchange rate of the Malaysian currency, in luring foreign direct investment into Malaysia and to pinpoint the effects of these factors using conventional quantitative analysis. The research's core premise is that different economic factors have different direct and indirect effects on luring foreign direct investment to Malaysia.Time series data were used for the research variables for Malaysia for the years 1990 to 2020. After conducting a stability test using the Phillips-Perron test, the results showed that the data's stability was at level (1). As a result, the ARDL model was applied to the research variables' data to meet the requirements for using this model. Additionally, a number of diagnostic tests for common difficulties were used, including the optimum lag period test (VAR), and the research came to a number of results, the most important of which is that cointegration exists. The research's key recommendations center on the necessity for Malaysia to prioritize the macroeconomic factors represented by the exchange rate, interest rate, and inflation because of their connections to and contributions to the attraction of foreign direct investment, as well as the need to develop new incentives for luring foreign capital.
Institution: University of Mosul
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4413170130