Kesan pelaburan langsung asing terhadap pertumbuhan ekonomi: perbandingan antara negara berpendapatan tinggi dengan sederhana menggunakan pendekatan kointegrasi asimetri

Translated title of the contribution: The effect of foreign direct investment on economic growth: Comparison between high income and middle income countries using asymmetric cointegration approach

Ruziana Mohd Ghazi, Norlin Khalid, Ishak Yussof

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

The relationship between foreign direct investment (FDI) and economic growth has been widely debated, however the comparative research between high and middle income countries based on asymmetric cointegration is limited. Therefore, this study examines the impact of foreign direct investment on economic growth by comparing high and middle income countries using yearly time series data set spanning from 1970 to 2014. The paper applies Johansen (1988) procedure for symmetric cointegration, while threshold cointegration test advanced by Enders and Siklos (2001) is used for asymmetric cointegration. Based on the results, developed countries such as Japan and Korea have asymmetrical coefficient of long run equilibrium and both countries shows negative deviation adjust faster when there is a deviation in long run. In contrast, developing countries such as Malaysia and Indonesia shows that the long run equilibrium is symmetrical. This shows that the coefficient of adjustment is equal whether the equilibrium error is positive or negative. Thus, these results have particularly important for policymakers to understand the relationship between FDI and economic growth, especially with regard to the asymmetrical effect. Policymakers need to anticipate the effect of shocks to the economy.

Original languageMalay
Pages (from-to)179-193
Number of pages15
JournalJurnal Ekonomi Malaysia
Volume51
Issue number2
Publication statusPublished - 1 Jan 2017

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Income
Cointegration
Foreign direct investment
Economic growth
Politicians
Coefficients
Deviation
Long-run equilibrium
Japan
Time series data
Korea
Indonesia
Developed countries
Threshold cointegration
Cointegration test
Developing countries
Malaysia
Johansen procedure
Comparative research

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

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title = "Kesan pelaburan langsung asing terhadap pertumbuhan ekonomi: perbandingan antara negara berpendapatan tinggi dengan sederhana menggunakan pendekatan kointegrasi asimetri",
abstract = "The relationship between foreign direct investment (FDI) and economic growth has been widely debated, however the comparative research between high and middle income countries based on asymmetric cointegration is limited. Therefore, this study examines the impact of foreign direct investment on economic growth by comparing high and middle income countries using yearly time series data set spanning from 1970 to 2014. The paper applies Johansen (1988) procedure for symmetric cointegration, while threshold cointegration test advanced by Enders and Siklos (2001) is used for asymmetric cointegration. Based on the results, developed countries such as Japan and Korea have asymmetrical coefficient of long run equilibrium and both countries shows negative deviation adjust faster when there is a deviation in long run. In contrast, developing countries such as Malaysia and Indonesia shows that the long run equilibrium is symmetrical. This shows that the coefficient of adjustment is equal whether the equilibrium error is positive or negative. Thus, these results have particularly important for policymakers to understand the relationship between FDI and economic growth, especially with regard to the asymmetrical effect. Policymakers need to anticipate the effect of shocks to the economy.",
keywords = "Asymmetric cointegration, Economic growth, Foreign direct investment",
author = "Ghazi, {Ruziana Mohd} and Norlin Khalid and Ishak Yussof",
year = "2017",
month = "1",
day = "1",
language = "Malay",
volume = "51",
pages = "179--193",
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issn = "0126-1962",
publisher = "Penerbit Universiti Kebangsaan Malaysia",
number = "2",

}

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T2 - perbandingan antara negara berpendapatan tinggi dengan sederhana menggunakan pendekatan kointegrasi asimetri

AU - Ghazi, Ruziana Mohd

AU - Khalid, Norlin

AU - Yussof, Ishak

PY - 2017/1/1

Y1 - 2017/1/1

N2 - The relationship between foreign direct investment (FDI) and economic growth has been widely debated, however the comparative research between high and middle income countries based on asymmetric cointegration is limited. Therefore, this study examines the impact of foreign direct investment on economic growth by comparing high and middle income countries using yearly time series data set spanning from 1970 to 2014. The paper applies Johansen (1988) procedure for symmetric cointegration, while threshold cointegration test advanced by Enders and Siklos (2001) is used for asymmetric cointegration. Based on the results, developed countries such as Japan and Korea have asymmetrical coefficient of long run equilibrium and both countries shows negative deviation adjust faster when there is a deviation in long run. In contrast, developing countries such as Malaysia and Indonesia shows that the long run equilibrium is symmetrical. This shows that the coefficient of adjustment is equal whether the equilibrium error is positive or negative. Thus, these results have particularly important for policymakers to understand the relationship between FDI and economic growth, especially with regard to the asymmetrical effect. Policymakers need to anticipate the effect of shocks to the economy.

AB - The relationship between foreign direct investment (FDI) and economic growth has been widely debated, however the comparative research between high and middle income countries based on asymmetric cointegration is limited. Therefore, this study examines the impact of foreign direct investment on economic growth by comparing high and middle income countries using yearly time series data set spanning from 1970 to 2014. The paper applies Johansen (1988) procedure for symmetric cointegration, while threshold cointegration test advanced by Enders and Siklos (2001) is used for asymmetric cointegration. Based on the results, developed countries such as Japan and Korea have asymmetrical coefficient of long run equilibrium and both countries shows negative deviation adjust faster when there is a deviation in long run. In contrast, developing countries such as Malaysia and Indonesia shows that the long run equilibrium is symmetrical. This shows that the coefficient of adjustment is equal whether the equilibrium error is positive or negative. Thus, these results have particularly important for policymakers to understand the relationship between FDI and economic growth, especially with regard to the asymmetrical effect. Policymakers need to anticipate the effect of shocks to the economy.

KW - Asymmetric cointegration

KW - Economic growth

KW - Foreign direct investment

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