Based on the Granger causality tests, the main findings do not advocate the OFDI-led
growth hypothesis, suggesting the Malaysian multinational firms may have lower
tendency to establish linkages with domestic firms because the home inputs might not be
price competitive internationally and perhaps, they are not suited to global market
requirements. To forge linkages between domestic firms and Malaysian multinationals,
and to facilitate home sourcing for OFDI activities, the Malaysian government should
prepare the home private sector for increasing competition in the era of globalization. For
instance, to make the sector more competitive, the government can design policies to
facilitate the sector to achieve economies of scale in production, to reduce the cost of
doing business, and to enhance local business linkages with Malaysian multinationals