THE POLICY-MAKING BEWEEN VIETNAM AND MALAYSIA IN ELECTRIC VEHICLE MANUFACTURING SECTOR TO ATTRACT FOREIGN DIRECT INVESTMENT(2015-2019)

Abstract

The world economy suffered after World War II. Countries who won the war became stronger economically and is inversely proportional to the losing country. Companies from victorious countries seek to expand and began to come into the developing countries. Foreign Direct Investment (FDI) has been a way to bolster their economic development. Among the countries receiving FDI are Malaysia and Vietnam. These countries tried to attract FDI in the automotive sector, particularly the Electric Vehicle Manufacturing industry. Respective governments of both countries developed and made various policies to ensure the flow of FDI. The differences of these policies will arguably create disparity and competition between them to attract the most FDI. This thesis aims to explain and compare the efforts and competitiveness of Malaysia and Vietnam to attract FDI. To that end, this thesis will use the framework of Foreign Direct Investment theory and Competitiveness theory. To further analyze the two countries, this thesis will use Porter’s Classic Diamond model to examine the variables that create the competitiveness of the two countries to attract FDI. This thesis found that there are significant number of different policies between the Malaysian and Vietnamese government in regard to attracting FDI in Electric Vehicle industry. This thesis also found that both countries have advantages over the other in certain areas. The advantages are scattered around various variables, and no country is significantly advantageous in one area.