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Original Articles

Foreign direct investment, pollution and economic growth: evidence from Malaysia

Pages 1709-1716 | Published online: 08 Feb 2010
 

Abstract

The bounds test developed by Pesaran et al. (Citation2001) is applied to examine the existence of a long-run relationship between foreign direct investment (FDI) inflows, pollution and output of Malaysia. Granger causality tests are also utilized to test for the presence of the short-run and long-run causal relationship between these variables. Both FDI inflows and pollution have short-run causal relationship on output. Output only has long-run causal relationship on FDI inflows.

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