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An Empirical Analysis of Foreign Direct Investment and Economic Growth in Bangladesh

Received: 11 December 2014     Accepted: 18 December 2014     Published: 20 January 2015
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Abstract

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.

Published in International Journal of Business and Economics Research (Volume 4, Issue 1)
DOI 10.11648/j.ijber.20150401.11
Page(s) 1-10
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Foreign Direct Investment, Economic Growth, Cointegration, Granger Causality, Bangladesh

References
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Cite This Article
  • APA Style

    Shahjahan Ali, Md. Rukunujjaman, Khandaker Jahangir Alam. (2015). An Empirical Analysis of Foreign Direct Investment and Economic Growth in Bangladesh. International Journal of Business and Economics Research, 4(1), 1-10. https://doi.org/10.11648/j.ijber.20150401.11

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    ACS Style

    Shahjahan Ali; Md. Rukunujjaman; Khandaker Jahangir Alam. An Empirical Analysis of Foreign Direct Investment and Economic Growth in Bangladesh. Int. J. Bus. Econ. Res. 2015, 4(1), 1-10. doi: 10.11648/j.ijber.20150401.11

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    AMA Style

    Shahjahan Ali, Md. Rukunujjaman, Khandaker Jahangir Alam. An Empirical Analysis of Foreign Direct Investment and Economic Growth in Bangladesh. Int J Bus Econ Res. 2015;4(1):1-10. doi: 10.11648/j.ijber.20150401.11

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  • @article{10.11648/j.ijber.20150401.11,
      author = {Shahjahan Ali and Md. Rukunujjaman and Khandaker Jahangir Alam},
      title = {An Empirical Analysis of Foreign Direct Investment and Economic Growth in Bangladesh},
      journal = {International Journal of Business and Economics Research},
      volume = {4},
      number = {1},
      pages = {1-10},
      doi = {10.11648/j.ijber.20150401.11},
      url = {https://doi.org/10.11648/j.ijber.20150401.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20150401.11},
      abstract = {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.},
     year = {2015}
    }
    

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    T1  - An Empirical Analysis of Foreign Direct Investment and Economic Growth in Bangladesh
    AU  - Shahjahan Ali
    AU  - Md. Rukunujjaman
    AU  - Khandaker Jahangir Alam
    Y1  - 2015/01/20
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    N1  - https://doi.org/10.11648/j.ijber.20150401.11
    DO  - 10.11648/j.ijber.20150401.11
    T2  - International Journal of Business and Economics Research
    JF  - International Journal of Business and Economics Research
    JO  - International Journal of Business and Economics Research
    SP  - 1
    EP  - 10
    PB  - Science Publishing Group
    SN  - 2328-756X
    UR  - https://doi.org/10.11648/j.ijber.20150401.11
    AB  - 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.
    VL  - 4
    IS  - 1
    ER  - 

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Author Information
  • MSS student, Department of Economics, Begum Rokeya University, Rangpur, Bangladesh

  • MSS student, Department of Economics, Begum Rokeya University, Rangpur, Bangladesh

  • Assistant Professor, Department of Economics, Begum Rokeya University, Rangpur, Bangladesh

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