Foreign Investment, Government Spending on Industries and Export Growth in Malaysia

This paper attempts to examine the impact of foreign investment and government spending on commerce and industry on Malaysia's export of manufactured goods. The paper focuses on the public input aspects of government spending and foreign investment. The manufactured products considered are (i) Consumer Electrical Products, (ii) Industrial and Commercial Electrical Products, (iii) Electrical Industrial Machinery and Equipment, (iv) Transport Equipment, (v) Textile Clothing and Footwear, (vi) Rubber Products and (vii) Paper and Pulp Products. The empirical analysis presented in this paper shows that the impact of an increase in real government spending on exports of manufactured goods is larger than the equivalent increase in real foreign investment.