Main Article Content

Rahim KIA LASHAKI
Faculty of Management, Multimedia University, Cyberjaya, Malaysia. Faculty of Business, Multimedia University, Melaka, 75450, Malaysia.
Malaysia
Elsadig Musa AHMED
Faculty of Management, Multimedia University, Cyberjaya, Malaysia. Faculty of Business, Multimedia University, Melaka, 75450, Malaysia.
Malaysia
Vol 26 No 3 (2017), Articles, pages 57-72
DOI: https://doi.org/10.15304/rge.26.3.4460
Submitted: 03-12-2017 Accepted: 03-12-2017 Published: 03-12-2017
Copyright How to Cite

Abstract

This paper inspects the influence of Foreign Direct Investment (FDI) inflows on
the catching up process developed by labour, physical capital, human capital, absorptive
capacity, telecommunications investment, and export channel on Asia Pacific's sustainable
productivity growth. A panel data from the period of 1970 to 2012 was used. The modified
extensive growth theory model that is based on output approach was applied. Both
growth accounting and econometric approaches were considered to estimating the
parameters of variables in first step and in the second step productivity indicators were
calculated. The results show that the FDI inflows and inputs used are input driven that
was generally more predominant than total factor productivity (TFP) growth. Meanwhile,
The GDP grew significantly during the periods of the study by development of human
capital, export, and telecommunications investment (input driven) variables, which
supported by FDI inflows. Accordingly, the impact of export channel on the TFP growth
found to be positive with insignificant contribution in most the group selected countries.
Cited by

Article Details

References

Abramovitz, M. (1956). Resource and Output Trends in the United States since 1870. American Economic Review, 46(2), 5-23.

Ahmed, E.M.. (2012). Are the FDI inflow spillover effects on Malaysia's economic growth input driven? Economic Modelling, 29(4), 1498-1504.

Ahmed, E.M.. (2012). Are trade spillover effects on East Asian economic growth productivity driven? World Journal of Entrepreneurship, Management and Sustainable Development, 8(4), 246-259.

Ahmed, E.M.. (2008) Foreign Direct Investment Intensity Effects on TFP Intensity of ASEAN 5 Plus 2, Journal of Economic Development, 33 (2), 155-166.

Ahmed, E.M.. (2010) the role of FDI Intensity in Achieving Productivity Driven Growth In Malaysian Economy, Applied Econometrics and International Development , 10(1), 195208.

Ahmed, E.M.. (2007) Biochemical Oxygen Demand Emissions Impact On Malaysia’s Manufacturing Productivity Growth, Global Economic Review, 36(4), 305 – 319

Ahmed, E.M.. (2006) The Impact of ICT and Human Capital In Achieving Knowledge-Based Economy: Applications on Malaysia’s Economy, published at World Review of Science, Technology and Sustainable Development, 3(3), 270-283.

Aitken, B., Hanson, G. H., & Harrison, A. E. (1997). Spillovers, foreign investment, and export behavior. Journal of International Economics, 43(1), 103-132.

Andrew B, B. a. J. B. J. (2004). Exporting and Productivity In The USA. Oxford Review of Economic Policy, 20(3).

Artige, L., & Nicolini, R. (2010). Market potential, productivity and foreign direct investment: Some evidence from three case studies. European Planning Studies, 18(2), 147-168.

Aw, B. Y., S. Chung, and M.J. Roberts (2000). Productivity and Turnover in the Export Market: Micro Evidence from Taiwan and South Korea. The World Bank Economic Review, 14, 65-90.

Bank, A. D. (2014). ASEAN 2030 Toward a Borderless Economic Community.

Bhavan Thangamani, C. X., and Chunping Zhong. (2011). Determinants and Growth Effect of FDI in South Asian Economies: Evidence from a Panel Data Analysis. International Business Research, 4(1).

Blomström, M., & Kokko, A. (1998). Multinational corporations and spillovers. Journal of Economic surveys, 12(3), 247-277.

Denison, E. F. (1962). “The sources of economic growth in the United States and the alternative before use”. New York: A Supplementary Paper, Committee for Economic Development, 229-255.

Denison, E. F. a. E., P. (1979). Accounting of Slower Economic Growth; the United States in the 1970s. The Brooking Institution, Washington, DC.

Devajit, M. (2012). Impact of Foreign Direct Investment on Indian economy.Research Journal of Management Sciences, 1(2), 29-31.

Griliches, Z. a. J., D.W. (1962). “Capital theory: technical progress and capital structure, sources of measured productivity change capital input”. American Economic Review 52(1), 50-61.

Hallward-Driemeier, M., Iarossi, G., & Sokoloff, K. L. (2002). Exports and manufacturing productivity in East Asia: A comparative analysis with firm-level data: National Bureau of Economic Research.

Hansakul, S. (2013). ASEAN Economic Community (AEC): A potential game changer for ASEAN countries.

Holmes, M. (2005). Ireland and the European Union: Nice, Enlargement and the Future of Europe. Manchester University Press, Political Science, 207

Indicators, W. D. (2012). The World Bank.

James, W. E., & Ramstetter, E. D. (2008). Trade, foreign firms and economic policy in Indonesian and Thai manufacturing. Journal of Asian Economics, 19(5), 413-424.

Jensen, A. B. B. J. B. (1999). EXPORTING AND PRODUCTIVITY. NBER Working Paper No. 7135.

Jorgenson, D. W., Gollop, F.M. and Fraumenri, B. (1987). Productivity and US Economic Growth,North Holland, Amsterdam.

Juthathip, J. (2007). Determinants of Export Performance in East and Southeast AsiaERD Working Paper, Asian Development Bank No. 106.

Kendrick, J. W. (1956). “Producative trends capital and labour”. Review of Economics and Statistics, 38(3), 248-257.

Kendrick, J. W. (1961). Productivity Trends in the United States. Princeton University Press,Princeton, NJ.

Kneller, R., & Pisu, M. (2007). Industrial linkages and export spillovers from FDI. The World Economy, 30(1), 105-134.

Kohpaiboon, A. (2003). “Foreign Trade Regimes and the FDI-Growth Nexus: A case Study of Thailand,” The Journal of Development Studies, 40(2), 55-69.

Kotrajaras, P. (2010). Foreign Direct Investment and Economic Growth: A Comparative Study among East Asian Countries. Applied Economics Journal, 17(2), 12-26.

Lall, S. (2000). ‘Technological change and industrialization in the Asian NIEs’, in L. Kim and R. R. Nelson (eds.), Technological Learning and Economic Development: The Experience of the Asian NIEs, Cambridge: Cambridge University Press.

Liu, H. L. a. X. (2009). Export-total factor productivity growth nexus in East Asian economies. Applied Economics, 41(1663–1675).

Lloyd, P. J. (1997). The role of foreign investment in the success of Asian industrialization. Journal of Asian Economics, 7(3), 407-433.

Mahadevan, R. (2007). “New evidence on the export-led growth nexus: a case study of Malaysia”. The World Economy, 30 (7), 1069-1083.

Marin, R. M. K. a. D. (1989). On Export and Productivity:A Causal Analysis. Review of Economics and Statistics, 71(4), 699-703.

Oguci, N., Amdzah, Bakar, Abidin, Shafii. (2002). Productivity of foreign and estic firms in the Malaysian manufacturing industry. Asian Economic Journal, 16 ((3)), 215–228.

Prasanna, N. (2010). Impact of Foreign Direct Investment on Export Performance in India. Society Science, 24(1), 65-71.

Rahim R, Noor M. and Ahmed M. A (2014) To What Extent Are the Social Inequality Impacts of FDI In The Selected ASEAN? Applied Econometrics and International Development, 14(1), 189-204.

Ramstetter, E. D. (1999). Trade propensities and foreign ownership shares in Indonesian manufacturing. Bulletin of Indonesian Economic Studies, 35(2), 43-66.

Rodrigue, J. (2007). FDI, Exports & Aggregate Productivity. Economics of Transition.

Sarel, M. (1996). Growth in East Asia: What We Can and What We Cannot Infer. International Monetary Fund,Economic Issues No 1.

Solow, R. M. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 65-94.

Solow, R. M. (1957). “Technical change and the aggregate production function”. Review of Economics and Statistics, 39, 312-320.

Stigler, G. J. (1947). Trends in Output and Employment. National Bureau of Economic Research,New York, NY.

Wagner, J. (2002). “The Causal Effects of Exports on Firm Size and Labour Productivity: First Evidence from a Matching Approach,”. Economics Letters 77, 287–292.

Weinstein, R. Z. L. a. D. E. (1999). Trade and Growth: Import Led or Export Led? Evidence from Japan and Korea. Working Paper No. 165.

Xu, X., & Sheng, Y. (2012). Are FDI spillovers regional? Firm-level evidence from China. Journal of Asian Economics, 23(3), 244-258.

Young, A. (1992). A tale of two cities: factor accumulation and technical change in Hong Kong and Singapore NBER Macroeconomics Annual 1992, Volume 7 (pp. 13- 64): MIT press.

Young, A. (1995). The tyranny of numbers: confronting the statistical realities of the East Asian growth experience. The quarterly journal of economics.