Foreign direct investment (FDI), added value and environmental-friendly practices in furniture manufacturing: the case of Malaysia and Vietnam
Malaysia as a low-cost wooden furniture production hub has attracted substantial foreign direct investment (FDI) over the last two decades. However, globalization of the worldwide furniture industry has increased the competitive pressure from newly emerging furniture-producing nations, especially...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English English |
| Published: |
2009
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| Online Access: | http://psasir.upm.edu.my/id/eprint/7107/2/Foreign%20direct%20investment.pdf http://psasir.upm.edu.my/id/eprint/7107/ http://dx.doi.org/10.1505/ifor.11.4.464 |
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| Institution: | Universiti Putra Malaysia |
| Language: | English English |
| Summary: | Malaysia as a low-cost wooden furniture production hub has attracted substantial foreign direct investment (FDI) over the last two decades.
However, globalization of the worldwide furniture industry has increased the competitive pressure from newly emerging furniture-producing
nations, especially Vietnam, which has displaced Malaysia as the largest exporter of furniture in the South East Asian region. Based on
this state of facts a study was undertaken to analyze the FDI trends in the Malaysian furniture industry from 1986 to 2005, using secondary
published data and questionnaire based survey. The results were compared against the characteristics of FDI in Vietnam. The results of
the study point out that although Malaysia offered greater political stability, better infrastructure, amenities, industrial-relation practices,
a more stable exchange rate and greater adoption of environmental-friendly practices; the lower production cost and favorable investment
policy appear to be the strengths of Vietnam in attracting foreign direct investments. Therefore, Malaysian policy-makers need to formulate
policies based on creativity and innovation that would pave the way for the manufacture of higher added-value products that would ensure
the continued attractiveness of Malaysia as a furniture FDI destination. |
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