Volume 4, Issue 1, February 2015, Page: 1-10
An Empirical Analysis of Foreign Direct Investment and Economic Growth in Bangladesh
Shahjahan Ali, MSS student, Department of Economics, Begum Rokeya University, Rangpur, Bangladesh
Md. Rukunujjaman, MSS student, Department of Economics, Begum Rokeya University, Rangpur, Bangladesh
Khandaker Jahangir Alam, Assistant Professor, Department of Economics, Begum Rokeya University, Rangpur, Bangladesh
Received: Dec. 11, 2014;       Accepted: Dec. 18, 2014;       Published: Jan. 20, 2015
DOI: 10.11648/j.ijber.20150401.11      View  3349      Downloads  410
Foreign Direct Investment (FDI) is assumed to benefit a poor country like Bangladesh, not only by supplementing domestic investment, but also in terms of employment creation, transfer of technology, increased domestic competition and other positive externalities. This paper focuses on the FDI-led growth hypothesis in the case of Bangladesh. The study is based on time series data from 1973 to 2013. The econometric framework of cointegration and error correction mechanism were used to capture two way linkages between variables interest. It is evident in the results that the regression analyses do not provide much support for the view of a robust link between FDI and growth in Bangladesh. It does not imply that FDI is insignificant. Rather, its analysis reduces the confidence in the belief that FDI has exerted an independent growth effect in Bangladesh. But net attitudes of the civil society on the impact of FDI on opportunities for domestic business and economic activities is positive and net attitudes of foreign firms toward FDI reveals that the investment climate has not improved in Bangladesh as a result of lack of good governance, corruption, political instability and disturbance, bureaucratic inertia, and poor low and order situation.
Foreign Direct Investment, Economic Growth, Cointegration, Granger Causality, Bangladesh
To cite this article
Shahjahan Ali, Md. Rukunujjaman, Khandaker Jahangir Alam, An Empirical Analysis of Foreign Direct Investment and Economic Growth in Bangladesh, International Journal of Business and Economics Research. Vol. 4, No. 1, 2015, pp. 1-10. doi: 10.11648/j.ijber.20150401.11
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