FOREIGN DIRECT INVESTMENT IN MANUFACTURING SECTOR IN MALAYSIA

This paper analyses the determinants of foreign direct investment (FDI) in the manufacturing sector in Malaysia from eleven countries during the period 1988 to 2000. The empirical results indicate that gross domestic product, lending interest rate, labour productivity, exports to home country and imports from home country significantly influenced the level of FDI inflows into Malaysia. However, exchange rate, exchange rate variation, wage and openness index were not important in influencing FDI. Key words: foreign direct investment, manufacturing secto