Determinants of FDI flows to developing economies: evidence from Malaysia

The paper reviews the literature identifying the determinants of the FDI flows to developing countries and attempts to lay bare the theories that underlie them.Asimple regression model is set up to assess the role of the identified determinants in the case of Malsysia.Causality tests indicate that over the range of regression rate of exchange, exports, Infrastructure expansion and rate of growth have been significant factors in that order. All have led the FDI flows; the reverse is not true