KEY INDICATORS INFLUENCING FOREIGN DIRECT INVESTMENT IN MALAYSIA
Keywords:
Political, Governmental and legal factors, Social and cultural factors, Location factors, Financial factors, Economic factorsAbstract
Foreign Direct Investment (FDI) is a direct investment into business or production in one country through an entity in alternative country, either via purchasing a business in the target country or via developing operations of a current business in that country. Despite the vast research by Malaysians and other foreign researchers about FDI in Malaysia, there are still other indicators that affect Malaysia as an attractive destination for FDI flows and consideration for any investment opportunity. This research is based on primary data, which was collected through questionnaires with a sample of 34 foreign companies invested in Malaysia. The SPSS software is used to analyze the data. The findings show that 85 percent of investors agree to invest in Malaysia again, most of them prefer to invest in the tourism industry due to many reasons such as country attractiveness, economic growth, technology availability, religious freedom, and access to capital. Investors consider Malaysia as a good destination for investing in South East Asia. Among all factors, social and cultural factors, location factors and economic factors have the most impact on FDI inflows in Malaysia and among independent variables, there is a significant relationship. This research can be useful and reliable for Malaysian government to change its policy in some industries and focus more in incentives that attract more foreign investors.
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