ABSTRACT
Malaysia has maintained a foreign investment-friendly regime since the colonial times when foreign capital came into the country to develop the plantation and mining sectors. Following independence in 1957, foreign direct investment (FDI) continued to be tapped for their assets to assist in the development of the country. These assets include, for example, their capital, as FDI brings investible financial resources into a capital-scarce country ( Lall, 2002, p. 325). More importantly, FDI inflows are more stable than portfolio investment. Since FDI takes the form of multinational corporations (MNCs) that are engaged in production or trade in the host economies, they also offer learning opportunities in terms of technology assimilation, skills and management, as well as market access.
