Factors That Affect The Foreign Direct Investment (FDI) In Johor Through The Perspective Of Marketing

Azman, Amilya (2016) Factors That Affect The Foreign Direct Investment (FDI) In Johor Through The Perspective Of Marketing. Project Report. UTeM, Melaka, Malaysia. (Submitted)

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Abstract

Foreign Direct Investment (FDI) plays a crucial role in speeding up the development and economic growth of a country. In particular, developing countries rely heavily on FDI to promote their economy as they face capital shortage for their development process. FDI not only brings in capitals and technology, but also skills into developing countries. And these ended up helping the countries to grow faster by satisfying the country’s needs. The strong growth performances experienced by Johor economy greatly depends on the FDI. FDI generates economic growth by increasing capital formation through the expansion of production capacity, promotion of export growth and creation of employment in Johor. Pearson’s correlation and multiple linear regressions model is applied to study the relationship between explanatory variables (political risk, infrastructure, market size, exchange rate, tax policy, labour cost and productivity and trade openness) and explained variable (Johor FDI inflow). Empirical results show that infrastructure, tax and labour cost significantly and positively affect FDI inflows in Johor. Meanwhile, political risk, market size, openness and exchange rate failed to establish a significant relationship with Johor FDI inflows.

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