What's Driving Private Investment in Malaysia? Aggregate Trends and Firm-Level Evidence

 
Author/Editor: Guimarães, Roberto Pereira ; Unteroberdoerster, Olaf
 
Publication Date: August 01, 2006
 
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Summary: Private sector investment has been a key source of growth in Malaysia over the last three decades, but after an unprecedented decline in the wake of the Asian crisis it has remained sluggish in recent years. Using aggregate and firm-level data, this paper aims to explain these trends and their implications for Malaysia's investment and growth outlook. Aggregate data point to sustained overinvestment in the years prior to the Asian crisis and the role of shifts in investor perceptions as important determinants of the recent decline in private investment. Meanwhile, firm-level data suggest that low profitability, along with financing constraints affecting smaller firms and those in the services sector, has also been important.
 
Series: Working Paper No. 06/190
Subject(s): Private investment | Malaysia | Economic growth

Author's Keyword(s): private investment | long- and short-run dynamics | Tobin's Q | corporate investment | panel data analysis
 
English
Publication Date: August 01, 2006
ISBN/ISSN: 0 / 1934-7073 Format: Paper
Stock No: WPIEA2006190 Pages: 26
Price:
US$15.00 (Academic Rate:
US$15.00 )
 
 
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