Determinants of Locational Choice of Malaysian Outward Foreign Direct Investment
This chapter aims to investigate the factors that influence the locational choice decision of Malaysian outward foreign direct investment (FDI). The study used panel data which consists of 34 countries, and the period of study spans 2000 and 2009. The Hausman–Taylor estimates reveal that income level of host countries and geographical proximity are the crucial factors that are taken into account when selecting the location to invest abroad. Investors are attracted to countries with high income and proximity. The findings of the study have some important implications on the strategy of internationalization of firms.
KeywordsLocational choice Hausman–Taylor estimates Outward FDI Malaysia
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