Outward Foreign Direct Investment from Malaysia: An Exploratory Study

In: Südostasien aktuell: journal of current Southeast Asian affairs, Band 26, Heft 5, S. 44-72

Abstract

Although Malaysia is well known as a host economy, there is little research on its investment abroad even though this has been steadily increasing over time. Using a case study approach based on Dunning's OLI framework, seven firms are studied in order to understand their motivations to invest abroad as well as home & host country policies that have facilitated or hindered their investments. The main motivations for these firms to invest abroad are quite varied, ranging from the low labor cost advantage in the host country, saturation of the domestic Malaysian market, as well as the need to enhance their export-competitiveness in third-country markets & to exploit the domestic market potential in other countries. The main home country policy that has benefited the companies in their overseas investment is the full tax exemption on income earned overseas. Host country policies such as tax incentives, while attractive, are not considered to be critical in their investment decisions. Equity constraints are also not considered as obstacles. Tables, References. Adapted from the source document.