[01] Aqsa Nasir, Hailey College of Commerce, Punjab University, Lahore, Pakistan.

The main function of this research is to observe the special effects of determinant, like exchange rate, market size and trade on the emerging economy of Malaysia with regard to foreign direct investment (FDI). Analyzing time series data forth period 1980-2010, simple OLS regression technique is used for estimating the results with two diagnostic tests, which are the Breusch-Pagon and the Durbin-Watson tests. The findings of our study show that, In Malaysia market size is positively correlated to foreign direct investment whereas trade and exchange rate are negatively correlate with foreign direct investment. The implication of this study is expedient for emerging economies like Malaysia which realize the importance of FDI and continuously strive upon making and renewing polices in order to attracting it. The main aim of this study is to investigate the impact of key determinants of foreign direct investment (FDI) which are market size, exchange rate and trade on the economy of Malaysia and also examine the extent to which these determinant influence policies for foreign direct investment (FDI) in Malaysian economy. This study also contributes towards determination of appropriate polices for foreign direct investment (FDI).

Foreign Direct Investment, Exchange Rate, Trade, Market Size, Malaysia

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