Bilateral Export Trade,Outward and Inward FDI: A Dynamic Gravity Model Approach Using Sectoral Data from Malaysia |
| |
| Authors: | Siew Yean Tham Koi Nyen Wong Ahmad Fadhli |
| |
| Institution: | 1. ISEAS-Yusof Ishak Institute, Singapore and Institute of Malaysian and International Studies, Universiti Kebangsaan Malaysia, Bangi, Selangor, Malaysia;2. Sunway University Business School, Sunway University, Selangor, Malaysia;3. Statistical Services Department, Bank Negara Malaysia, Kuala Lumpur, Malaysia |
| |
| Abstract: | In light of a change in the foreign direct investment (FDI) landscape such as the rapid growth of outward FDI from Malaysia since 2007, this article ascertains the possible impact of inward and outward FDI on Malaysia’s bilateral export trade at the sectoral level, using a dynamic gravity approach. The findings reveal that both inward and outward FDI are complementary to bilateral export trade in the services, mining, and manufacturing sectors. Furthermore, the distance elasticity and the real effective exchange rate have a different negative impact on different sectors. Overall, the sectoral bilateral exports could not insulate against external events. |
| |
| Keywords: | bilateral exports dynamic gravity model system GMM inward FDI Malaysia outward FDI |
|
|
