Foreign direct investment (FDI), added value and environmental-friendly practices in furniture manufacturing: the case of Malaysia and Vietnam
Abstract: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.
Document Type: Research Article
Affiliations: 1: Faculty of Forestry, Universiti Putra Malaysia, 43400 UPM, Serdang, Selangor, Malaysia. 2: Centre for Conservation and Sustainability, Buckinghamshire New University, Queen Alexandra Road, High Wycombe, Bucks, HP11 2 JZ, UK.
Publication date: December 1, 2009
- The International Forestry Review is a peer-reviewed scholarly journal that publishes original research and review papers on all aspects of forest policy and science, with an emphasis on issues of transnational significance. It is published four times per year, in March, June, September and December. Theme editions are a regular feature and attract a wide audience.
The IFR is part of The Global Forest Information Service - GFIS
International Forestry Review has a 5-year impact factor of 1.733
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