Foreign Direct Investment, Trade, and Economic Growth: An Empirical Analysis of Bangladesh

By M. Hussain, M. Haque. 2016

148 citations recorded by the source corpus.

The study reveals that there is a relationship between foreign direct investments, trade, and growth rate of per capita GDP for Bangladesh with the help of annual time series data for 1973 to 2014. The Vector Error Correction Model (VECM) analysis shows that there is a long-term relationship between these variables. To check the validity of the VECM model, we did a few post-estimation diagnostic tests, and found that the residuals of the regressions have a normal distribution and do not show any auto-correlation. The trade and foreign investment variables have a significant impact on the growth rate of GDP per capita. Because FDI and trade are two important components of economic growth in Bangladesh, it is important to frame policies that promote growth and reduce the barriers for capital flows.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/6c714cafa447262712d136828cade3efb573a0f5

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In Economics and Econometrics

1. Bibhuti Sarker
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Citations in the corpus

• Nexus between foreign direct investment and economic growth in Bangladesh: an augmented autoregressive distributed lag bounds testing approach (2020, background): “In the absence of adequate local investment, FDI has been attracted from industrially advanced countries to accelerate the path of industrialization, to foster and maintain sustained economic growth, and to reduce the level of unemployment (Hussain and Haque 2016).”