Foreign portfolio investment and economic growth in Malaysia

This study examines the relationship between foreign portfolio investment (FPI) and Malaysia’s economic performance. In particular, the study analyses the relationship between FPI and real gross domestic product (GDP) using the widely adopted Granger causality test and the more recent Toda and Ya...

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Main Authors:	Duasa, Jarita, Kassim, Salina
Format:	Article
Language:	English
Published:	Pakistan Institute of Development Economics 2009
Subjects:	HC94 By region or country HG4501 Stocks, investment, speculation
Online Access:	http://irep.iium.edu.my/11819/ http://irep.iium.edu.my/11819/1/salina_Kassim_3.pdf

id	iium-11819
recordtype	eprints
spelling	iium-118192013-06-13T03:34:13Z http://irep.iium.edu.my/11819/ Foreign portfolio investment and economic growth in Malaysia Duasa, Jarita Kassim, Salina HC94 By region or country HG4501 Stocks, investment, speculation This study examines the relationship between foreign portfolio investment (FPI) and Malaysia’s economic performance. In particular, the study analyses the relationship between FPI and real gross domestic product (GDP) using the widely adopted Granger causality test and the more recent Toda and Yamamoto’s (1995) non-causality test to establish the direction of causation between the two variables. Similar method is also applied on the relationship between volatility of FPI and real GDP. Additionally, the study uses an innovation accounting by simulating variance decompositions and impulse response functions for further inferences. Using quarterly data covering the period from 1991 to 2006, the study finds evidence that economic growth causes changes in the FPI and its volatility and not vice versa.. The findings suggest that economic performance is the major pull factor in attracting FPI into the country. Thus, it must be ensured that the Malaysian economy remains on a healthy and sustainable growth path so as to maintain investor confidence in the economy. Pakistan Institute of Development Economics 2009 Article PeerReviewed application/pdf en http://irep.iium.edu.my/11819/1/salina_Kassim_3.pdf Duasa, Jarita and Kassim, Salina (2009) Foreign portfolio investment and economic growth in Malaysia. The Pakistan Development Review, 48 (2). ISSN 0030-9729
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HC94 By region or country HG4501 Stocks, investment, speculation
spellingShingle	HC94 By region or country HG4501 Stocks, investment, speculation Duasa, Jarita Kassim, Salina Foreign portfolio investment and economic growth in Malaysia
description	This study examines the relationship between foreign portfolio investment (FPI) and Malaysia’s economic performance. In particular, the study analyses the relationship between FPI and real gross domestic product (GDP) using the widely adopted Granger causality test and the more recent Toda and Yamamoto’s (1995) non-causality test to establish the direction of causation between the two variables. Similar method is also applied on the relationship between volatility of FPI and real GDP. Additionally, the study uses an innovation accounting by simulating variance decompositions and impulse response functions for further inferences. Using quarterly data covering the period from 1991 to 2006, the study finds evidence that economic growth causes changes in the FPI and its volatility and not vice versa.. The findings suggest that economic performance is the major pull factor in attracting FPI into the country. Thus, it must be ensured that the Malaysian economy remains on a healthy and sustainable growth path so as to maintain investor confidence in the economy.
format	Article
author	Duasa, Jarita Kassim, Salina
author_facet	Duasa, Jarita Kassim, Salina
author_sort	Duasa, Jarita
title	Foreign portfolio investment and economic growth in Malaysia
title_short	Foreign portfolio investment and economic growth in Malaysia
title_full	Foreign portfolio investment and economic growth in Malaysia
title_fullStr	Foreign portfolio investment and economic growth in Malaysia
title_full_unstemmed	Foreign portfolio investment and economic growth in Malaysia
title_sort	foreign portfolio investment and economic growth in malaysia
publisher	Pakistan Institute of Development Economics
publishDate	2009
url	http://irep.iium.edu.my/11819/ http://irep.iium.edu.my/11819/1/salina_Kassim_3.pdf
first_indexed	2023-09-18T20:21:05Z
last_indexed	2023-09-18T20:21:05Z
_version_	1777408111453143040

Foreign portfolio investment and economic growth in Malaysia

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