Surveying sources of economic growth: empirical evidence from Malaysia

This study investigates the impact of various resources, specifically both tangible and intangible ones, together with capabilities of Malaysian listed firms, on their performance. This empirical study attempts to enrich the understanding of the resources-performance relationship, which is one of a business process within the firm, as well as filling the gaps in present knowledge. Firms, which are not able to develop and sustain their performance, are associated with the vulnerability and adverse performance result, especially during various periods of economic crisis (three sub-periods of major shocks, i.e., The Volcker Shock (Commodities Shock) of early 1980s, Asian Financial Crisis of the late 1990s, and the Global Financial Meltdown of 2008). Hence, this research intends to explore which resources matter the most to firm profitability and its success. Drawing upon the combination of Donabedian’s structure process outcome and resource-based theories of the firm a conceptual framework is developed. Data for the study were collected from a sample of 250 publicly traded companies listed on Bursa Malaysia (MYX). In order to achieve the objective and response to the study question, partial least square and regression analysis are applied. Findings indicate that tangible resources have no impact, while intangible resources have positive and significant impact on firm performance. In addition, results show that efficient allocation of intangible resources is crucial to achieving good performance.

Foreign direct investment (FDI) inflows to Vietnam have increased significantly in recent years. Theoretically, capital inflows will put pressure on the overvaluation of local currencies in countries, despite different exchange rate mechanisms. So, the problem facing the Vietnamese government is the need to examine the relationship between the exchange rate and FDI in order to develop effective policies. This study examined the relationship between the exchange rate and FDI in Vietnam in the period of 2005–2019 using the VAR (vector autoregression) model based on quarterly frequency data. The new points of this study are: (i) using the real effective exchange rate (REER) of the Vietnamese currency with 143 major trading partners of Vietnam; and (ii) adding two control variables into the VAR model to examine the relationship between the exchange rate and FDI in Vietnam – a case study for developing countries. The findings show that, firstly, there is a positive causal relationship between FDI and Vietnam’s real effective exchange rate. Secondly, trade openness has a positive impact on FDI and REER in Vietnam. Thirdly, economic growth has an impact on REER, but no statistically significant impact on FDI was found. The findings can provide useful information to help policymakers plan and make decisions on future policies and support further research studies.

The present paper develops a general production function framework, augmented with two institutional variables namely bureaucracy and corruption on 28 transition economies over the period 2000-2015. The authors use various econometric specifications and apply both the Fixed Effects, as well as the advanced system Generalized Method of Moments (GMM) panel data techniques. Empirical findings suggest that the impact of openness in terms of foreign direct investment and international trade is advantageous to all the economies of the panel. Furthermore, the findings indicate that classical growth determinants, such as labor and physical capital, have the expected positive contribution, while macroeconomic instability has a negative effect on real economic activity. Regarding the impact of the two institutional variables, corruption, and bureaucracy, the authors retrieve more influential results, as their impact appears to be diametrically opposite between the former Soviet Union states and the rest of European transition economics.