The Impact of Tourism and Foreign Direct Investment on Economic Development in Malaysia

Sim, Kar Mun (2022) The Impact of Tourism and Foreign Direct Investment on Economic Development in Malaysia. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

This paper explores the relationship between economic growth and macroeconomic factors such as tourism and foreign direct investment in Malaysia. This paper examines the relationship between gross domestic products, tourism receipts and foreign direct investment in Malaysia from year 1995 to year 2019 which consists of 24 observations. This research employed several analysis tools such as Lag-length selection, Multilinear Regression, Diagnostic Checking, and Linear Correlation Coefficients to evaluate the relationships. Lag-length selections is used to determine the appropriate lag length. Multilinear regression is employed to determine the linear connection between dependent variable and independent variables. Diagnostic checking such as Heteroskedasticity and Autocorrelation is utilised to examine if the model is free from heteroskedasticity and autocorrelation problems. Also, Multicollinearity test in diagnostic checking is used to detect if there exists an inter-relation between the independent variables. Normality test such as Jarque-Bera test is employed to examine whether the data in the model have normality distributed. This appropriate for the above models will be provided and empirical issues will also be addressed.