The inflows of foreign direct investment (FDI) are important for a country's economic development, but the world market for FDI has become more competitive. This paper empirically analyses the exchange rate movements and foreign direct investment (FDI) relationship using annual data on ASEAN economies, that is, Malaysia, the Philippines, Thailand, and Singapore. By employing ARDL bounds test approach, the empirical results show the existence of significant long-run cointegration between exchange rate and FDI for the case of Singapore, Malaysia, and the Philippines with all countries recording negative coefficient implying that the appreciation of Singapore dollar, Malaysian ringgit, and the Philippine peso has a positive impact on FDI inflows. Using the ECM based ARDL approach for causality test, both Singapore and the Philippines show long-run bidirectional causality between exchange rate and FDI whereas long-run unidirectional causality running from the exchange rate to FDI in Malaysia. Furthermore, this study also found that short-run unidirectional causality running from the exchange rate to FDI exists in Singapore.
The purpose of this paper is to raise certain questions within the Malaysian banking sector and find the appropriate answers. The research questions of this paper are: a) whether Islamic banks are more stable relative to conventional banks; and b) what are the determinants of stability for both types of banks? In measuring and comparing the stability of Islamic and conventional banks, this study employs the financial soundness indicators (FSI) of the International Monetary Funds (IMF) and the z-score index. These are then followed by a series of parametric and non-parametric tests. Thereafter, a pooled ordinary least squares (OLS) robust regression is applied to examine the determinants of stability for Islamic and conventional banks. The results reveal that Islamic banks are significantly less stable than conventional banks. However, when the analysis is conducted based on a sample of small and large banks, the results suggest that only large Islamic banks are less stable than large conventional banks. In contrast, small Islamic banks are found to be more stable than small conventional banks. Furthermore, the results reveal that bank size, the level of capitalisation and income diversification are important determinants for the stability of Malaysian Islamic and conventional banks.
This paper attempts to estimates the technical efficiency for all manufacturing industries in Malaysia for the periods of 1986 up to 1995. By utilizing the stochastic frontier model (SFM), it is shows that the technical efficiency for all sectors constantly increases at 0.01 percentage points each year. The Malaysian manufacturing industry during the stipulated periods was classified as input-driven, largely dominated by labour and capital. It was found that the technical efficiency over time across industries is rising over time at a decreasing rate and the resource based industries (RBI) found to be technically efficient compared to non-RBI groups.
This study attempts to test a hypothesis of the relationship between the tourism sector and economic growth in Malaysia. Although a large number of literatures indicate that there is strong correlation between the tourism industry and economic growth, not much is known on the dynamic inter-relationship between these variables. This study employs recently developed ARDL bounds testing approach to cointegration. The estimated result based on the long run time series behaviour for the number of tourist arrival and economic growth indicator shows that these variables are not cointegrated. In the short run analysis, we found that economic growth has unidirectional Granger caused to the tourism activities. Recognition of the existence of a causal relationship between international tourism and economic growth has important implications for the development of different tourism activities and policy decisions. In order to attract tourism activities, effort must be taken to promote stability as well as sustainability of the economy of this country.
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