Inward FDI may lead to strong economic growth in Malaysia and since 1990s inward FDI is one of the sources of economic growth. The purpose of this study is to investigate the relationship between inward FDI with economic growth, the determinants of inward FDI and the impacts of inward FDI on Malaysia’s economy. The secondary data such as journal articles, conference paper, and the annual data for inward FDI and GDP is collected to complete my study. Overall, the relationship between both variables is positive, the significant of determinants are interest rates, trade openness, corruption, China joining WTO and inflation rate, as for the impacts of inward FDI, it can affect economy positively which is increase productivity and decline the unemployment rate and negatively which is crowd-out effects by non-FDI domestic industry. Thus, policymaker should revise the policy so that it can attract foreign investors and does not neglect any domestic industries at the same time.It is important to understand and know how important inward FDI to Malaysia since it contributes and speeds up our economy growth. Thus, this study will contribute to readers especially to the policymakers as it gives a clearer picture of what affects FDI inflows in Malaysia such as market size, exchange rate, inflation rate, trade openness, infrastructure quality and political condition. Besides, this study also can be a reference to government in formulating suitable policy to attract more investors to invest in our country. One
of the limitations that I faced is data
availability. I found some of the journals could not access freely. So, I could
not make reference to it even if the
content of the journal may help me in my research.
limitation is I do not have the power to control over the primary data
given in the Department of Statistics Malaysia (DOSM). There are a chances that the data given might have
some measure or record error. Thus, the trend of inward FDI and GDP growth in
Malaysia for five years shown in above may have some error in it.