COMPLETION REPORTMalaysia in the eyes' of Japanese Multinational Corporations: A Need for New Paradigms?
Dr. Tajul Ariffin Masron (+2)
Senior Lecturer
School of Management, Universiti Sains Malaysia
The primary objective of this research is to examine the factors that can help Malaysia
to attract more foreign direct investment (FDI) from Japan (henceforth JFDI) to further
boost Malaysian economic development. In the first paper, I tried to investigate whether
there is unique integratlon or relationship between JFDI in Malaysia versus JFDI in othercompetitors, which is not limited to ASEAN. General observation is that Malaysia iscompeting with other ASEAN countries for JFDI, partly because ASEAN is sharing thesame endowment and hence, similar economic structure. However, against the non-ASEAN
East Asian countries, it seems that JFDi in Malaysia is complementary to JFDI in thosedestinations. This finding becomes the main policy implication from the first study thatMalaysia should focus on developing comparative advantage within East Asian region to bepart of crucial regional production networking in order to maintain inflows of JFDI.
In the second paper which is the continuation of the first paper, I tried to address thecompeting issue within ASEAN for JFDI. The focus is can it be possible to transformcompeting to complementing. By using threshold effect model, I found that it is possible but
a bit challenging. The reason is whether the low income ASEAN countries are wiiling tosacrifice some sectors and just focus on several few sectors as their main production. While
this strategy of economic specialization could be beneficial in the long-run theoretlcally toall ASEAN members as they can also strengthen ASEAN economic cooperation, but eachcountry needs to come out with sound short-term measure to assure poverty can bealleviated at the same time slowly.
Finally, with the growing interest on instltutional quality (IQ), I explored the role of
Malaysian IQ level on JFDI. At this stage, I observed that IQ failed to exert any significant
impact on JFDI in the first model of direct impact. The second modified model which isbased on ratio of IQ also failed to fully explaln the behavior of JFDI into Malaysia. The ratioof IQ is based on the assumption that the effectiveness of Malaysian IQ is subject to change
in IQ level of competitors. Then I further modified the model by employing threshold effectcase and found weak evidence that the effect of Malaysian IQ is seriousiy affected by thebehavior of IQ in neighboring competitors. Since the results are poorly supporting the roleof IQ, I conducted several discussions with economic experts, ranging from those at highrank in government institution such as Security Commission and also those from JapaneseMNCs. According to them, nothing weird with my finding as most Japanese MNCs believe
Malaysian IQ is relative good and no issue on that, but insist that it may not be sufficient toallow them to produce at competitive cost as compared to other ASEAN countries. Hence,maintaining IQ is good but no assurrance that it will lure more JFDI in the future.

Publication of the Results of Research Project:
Verbal Presentation (Date, Venue, Name of Conference, Title of Presentation, Presenter, etc.)
1st Paper:
Date & Venue: 28-29 January 2016 at Hotel NEO Kuta, Bali, Indonesia.
Conference: 1st International Conference on Advanced Business & Social Sciences(ICABSS-2016).
Paper Title: Japanese FDI in Malaysia and Other Asian Countries: Are They CoIntegrated?
Author: Tajul Arlffin Masron (also the presenter).
Future Publication: Plan to be submitted to Malaysian Journal of Economic Studies(SCOPUS).
2nd Paper:
Date & Venue: 28-30 August 2016, at Primula Beach Hotel, Kuala Terengganu,Malaysia.
Conference: 4th International Conference on Accounting, Business & Economics 2016[BEST PAPER AWARD]
Paper Title: Japanese FDI and the effectiveness of Institutional Quality in Malaysia.
Authors: Tajul Ariffln Masron (presenter) & Takemi Fujikawa (co-author).
Future publication: accepted for publication at Journal of Sustainability Sclence &Management (JSSM) by Universiti Malaysia Terengganu (SCOPUS)
3rd paper:
Date & Venue: 28-30 August 2016, at Primula Beach Hotel, Kuala Terengganu,Malaysia.
Conference: 4th international Conference on Accounting, Business & Economics
2016,
Paper Title: Japanese FDI in Malaysia and Other ASEAN countries: Will Specialization
Helps to make Them Complementary?
Authors: Tajul Ariffin Masron and Ema lzatiZuIl Kepili (presenter).
Future Publication: Plan to submit to International Economic Journal (SCOPUS) byTaylor & Francis after revision.
Thesis (Name of Journal and its Date, Title and Author of Thesis, etc.)
Book (Publisher and Date of the Book, Title and Author of the Book, etc.)