Malaysia-West Asia Relations and Foreign Direct Investment: Proposal for an Ummah Network Based on Social Capital Concept

Journal of International Social Research, Vol. 2, No. 6, pp. 434–445, 2009

12 Pages Posted: 8 May 2009

See all articles by Wai-Mun Har

Wai-Mun Har

Universiti Tunku Abdul Rahman (UTAR)

Zheng-Ling Lam

affiliation not provided to SSRN

Khai-Yi Liew

affiliation not provided to SSRN

Date Written: March 2009

Abstract

Research on foreign direct investment (FDI) often ignores the psychology aspect of relationship. The role of relationship is embedded in Bourdieu’s social capital, believing that networking and friendship could be valuable factors for attracting business. In macroeconomic context, international relations could be an important determinant in attracting foreign investment. Manifestations of this conceptualization are guanxi and “Bamboo network” in Chinese business culture. Applying to Malaysia international relations with Islamic countries of West Asia, an “Ummah network” can be established to enable win-win situation in investment decision. This is in contrast with the rational behaviour of profit maximization motive of the classic school of thought. In reality, foreign investors with higher degree of negotiation power may seek maximum incentives at the expanse of the welfare of the host country, thus evaporating any possibility of win-win outcome. Given close relationship between Malaysia and Islamic countries of West Asia through Islam brotherhood and membership of Organization of the Islamic Conference (OIC), Malaysia is in the best position to utilize its social capital to attract mutually beneficial FDI rather than giving excessive incentive to profit maximization oriented investors. Furthermore, growing tension and suspicion between Western world and Islamic countries strengthen Malaysia’s position to build up long term investment relationship with West Asian countries. Hence, this paper aims to explore potential mutually beneficial Malaysia-West Asia partnership through the perspective of social capital networking with the focus on foreign investment. The ultimate objective of this paper is to propose a framework for the establishment of a relationship-based “Ummah network” between Malaysia and West Asia.

Keywords: Malaysia-West Asia international relations, FDI, social capital, Ummah network

Suggested Citation

Har, Wai-Mun and Lam, Zheng-Ling and Liew, Khai-Yi, Malaysia-West Asia Relations and Foreign Direct Investment: Proposal for an Ummah Network Based on Social Capital Concept (March 2009). Journal of International Social Research, Vol. 2, No. 6, pp. 434–445, 2009, Available at SSRN: https://ssrn.com/abstract=1398365

Wai-Mun Har (Contact Author)

Universiti Tunku Abdul Rahman (UTAR) ( email )

Sungai Long Campus Lot PT 21144
Bandar Sg. Long, Cheras, Selangor D.E.,
Bandar Sungai Long, 43000
Malaysia

Zheng-Ling Lam

affiliation not provided to SSRN ( email )

Khai-Yi Liew

affiliation not provided to SSRN ( email )

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