Developing Countries’ Outward Investment: Push Factors for Malaysia

Outward investment enables firms to enter new markets, import intermediate products at a lower cost and accessibility to foreign technology. The FDI outflows marked the strength of economies, the dynamism of transnational corporations, TNCs and growing aspiration to compete in new markets. Thus in relation to the contemporary economic development mainly globalisation and regionalism issue, in the context of Malaysia as one of the emerging developing countries, identifying the primary determinants contributed to OFDI of Malaysia is crucial for sustainable growth. This study focuses on the factors that determine Malaysia's OFDI using Dunning's Push Factors theory. Multiple regression analysis is performed on time series data beginning from 1981 to 2011. The study finds that GDP, level of IFDI (inward FDI) stocks, productivity level, exchange rate, export level and patent, a new variable added in the study of Malaysia, are the major pushing factors of Malaysia's OFDI.