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Foreign Direct Investment-growth Nexus Revisited: New Evidence from Bangladesh

Author

Listed:
  • Munira Begum

    (Western Sydney University , Australia)

  • Mohammad Salahuddin

    (Trent University, Canada,)

  • Mamta Chowdhury

    (Western Sydney University, Australia,)

  • Abu N. M. Wahid

    (Tennessee State University, USA)

Abstract

Due to mixed empirical findings, FDI-growth nexus is still an issue of debate. This paper estimates the long-run association between FDI and economic growth for Bangladesh using time series data for the period 1985-2014. Results from Dynamic Ordinary Least Squares (DOLS) demonstrate positive and significant long-run relationship between FDI and economic growth. A bidirectional causality also exists between them. The study further indicates that financial development and trade openness also Granger cause economic growth. Variance decomposition analysis results confirm the future positive role of FDI, trade openness and financial development in the context of Bangladesh. Policy implications are discussed.

Suggested Citation

  • Munira Begum & Mohammad Salahuddin & Mamta Chowdhury & Abu N. M. Wahid, 2018. "Foreign Direct Investment-growth Nexus Revisited: New Evidence from Bangladesh," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 168-174.
    • Handle: RePEc:eco:journ1:2018-03-21
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Bangladesh; DOLS; economic growth; FDI;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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