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The Impact of Foreign Direct Investment (Fdi), Trade Balance and Human
Capital on Economic Growth (Gdp) In Malaysia
Tharani A/P Rajindran
Supervisor: Dr Suhal Kusairi
Bachelor of Economic (Natural Resources)
School Of Social and Economic Development
Malaysia is one of the developing country in the world where the foreign sector, trade
and human capital are very important in the economic growth. Therefore, objective
of this study is to investigate the impact on foreign direct investment, trade balance
and human capital on economic growth in the short-run and long-run as well. This
study was conducted by using time series data from the period 1986 to 2015 by using
the VECM method. The results stated that FDI has a positive relationship with GDP in
short term whereas the trade balance and human capital variables have negative
relationship towards GDP which have no short term relationship. Furthermore, the
relationship between trade balance and human capital are negative in long term
towards GDP whereas FDI has negative relationship and has no long term relationship
with GDP. Implication from this result shows that GDP can be used to predict the long
term relationship between the FDI, trade balance and human capital.
JEL Code: E22, J24, F41, E01
Keywords: Foreign Direct Investment, Trade Balance, Human Capital, Economic
growth
1382 | UMT UNDERGRADUATE RESEARCH DAY 2018