Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail

The major thrusts of the 10th Malaysia Plan are geared towards transforming Malaysia into a high income nation. Higher income per capita can only be achieved with higher growth of GDP. In the past, GDP growth in Malaysia is supported by the influx of foreign direct investment which fuels the export-...

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Main Authors:	Mohd Sidek, Noorzahirah, Ismail, Mahadzir
Format:	Research Reports
Language:	English
Published:	Research Management Institute (RMI) 2012
Subjects:	Investment, capital formation, speculation Foreign investments. Country risk
Online Access:	http://ir.uitm.edu.my/id/eprint/24830/ http://ir.uitm.edu.my/id/eprint/24830/1/LP_NOOR%20ZAHIRAH%20MOHD%20SIDEK%20RMI%2012_5.pdf

id	uitm-24830
recordtype	eprints
spelling	uitm-248302019-07-16T09:19:17Z http://ir.uitm.edu.my/id/eprint/24830/ Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail Mohd Sidek, Noorzahirah Ismail, Mahadzir Investment, capital formation, speculation Foreign investments. Country risk The major thrusts of the 10th Malaysia Plan are geared towards transforming Malaysia into a high income nation. Higher income per capita can only be achieved with higher growth of GDP. In the past, GDP growth in Malaysia is supported by the influx of foreign direct investment which fuels the export-oriented industries. Domestic investment in terms of infrastructure and human capital development further enhance the influx of foreign direct investment into Malaysia. Hence, the main objective of this study is to derived a model which illustrates the dynamic interactions between income per capita, domestic investment and foreign investment. We extend the existing growth model by incorporating the impact of both domestic and foreign investment with a threshold which connotes the novelty of this study. Given the identification of the model, we estimate a threshold value which indicate the minimum or a threshold amount of investment needed to promote income per capita growth. Subsequently, we simulate the impact of shocks of foreign investment and domestic investment on income per capita. Finally, the robustness of the model (s) and the estimation of the threshold value (s) are conducted using heuristic approaches of genetic algorithm, neuro network and support vector machine. The final outcome of this study is the formation of a generic theoretical model which is applicable, at least, in developing countries. The estimated threshold value (s) would be a guide to the government or policy makers as to how much investment is needed to sustain and increase income per capita. Eventually, the theoretical model serves as a benchmark model which would be useful for future simulations, predictions and other extensions in growth modelling in developing world. Research Management Institute (RMI) 2012 Research Reports NonPeerReviewed text en http://ir.uitm.edu.my/id/eprint/24830/1/LP_NOOR%20ZAHIRAH%20MOHD%20SIDEK%20RMI%2012_5.pdf Mohd Sidek, Noorzahirah and Ismail, Mahadzir (2012) Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail. [Research Reports] (Unpublished)
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
language	English
topic	Investment, capital formation, speculation Foreign investments. Country risk
spellingShingle	Investment, capital formation, speculation Foreign investments. Country risk Mohd Sidek, Noorzahirah Ismail, Mahadzir Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail
description	The major thrusts of the 10th Malaysia Plan are geared towards transforming Malaysia into a high income nation. Higher income per capita can only be achieved with higher growth of GDP. In the past, GDP growth in Malaysia is supported by the influx of foreign direct investment which fuels the export-oriented industries. Domestic investment in terms of infrastructure and human capital development further enhance the influx of foreign direct investment into Malaysia. Hence, the main objective of this study is to derived a model which illustrates the dynamic interactions between income per capita, domestic investment and foreign investment. We extend the existing growth model by incorporating the impact of both domestic and foreign investment with a threshold which connotes the novelty of this study. Given the identification of the model, we estimate a threshold value which indicate the minimum or a threshold amount of investment needed to promote income per capita growth. Subsequently, we simulate the impact of shocks of foreign investment and domestic investment on income per capita. Finally, the robustness of the model (s) and the estimation of the threshold value (s) are conducted using heuristic approaches of genetic algorithm, neuro network and support vector machine. The final outcome of this study is the formation of a generic theoretical model which is applicable, at least, in developing countries. The estimated threshold value (s) would be a guide to the government or policy makers as to how much investment is needed to sustain and increase income per capita. Eventually, the theoretical model serves as a benchmark model which would be useful for future simulations, predictions and other extensions in growth modelling in developing world.
format	Research Reports
author	Mohd Sidek, Noorzahirah Ismail, Mahadzir
author_facet	Mohd Sidek, Noorzahirah Ismail, Mahadzir
author_sort	Mohd Sidek, Noorzahirah
title	Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail
title_short	Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail
title_full	Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail
title_fullStr	Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail
title_full_unstemmed	Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail
title_sort	estimating the optimal threshold value for foreign investment in malaysia / noorzahirah mohd sidek and mahadzir ismail
publisher	Research Management Institute (RMI)
publishDate	2012
url	http://ir.uitm.edu.my/id/eprint/24830/ http://ir.uitm.edu.my/id/eprint/24830/1/LP_NOOR%20ZAHIRAH%20MOHD%20SIDEK%20RMI%2012_5.pdf
first_indexed	2023-09-18T23:13:27Z
last_indexed	2023-09-18T23:13:27Z
_version_	1777418955645779968

Estimating the optimal threshold value for foreign investment in Malaysia / Noorzahirah Mohd Sidek and Mahadzir Ismail

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