Foreign Inflows and Economic Growth of BIMSTEC: A GMM Approach

Abstract

The study is an attempt to test the influence of foreign capital inflows on BIMSTEC nations' economic growth of BIMSTEC nations during the time 2010-2021 by employing the one-step system GMM method. the data has been taken from WDI, 2022. The outcomes revealed that remittances, FDI, and inflation have an adverse influence on growth whereas debt, openness to trade, population, and aid have an optimistic influence on economic growth. The impact of population, remittance, and foreign is found statistically significant whereas the remaining variables have an insignificant impact. This led all the BIMSTEC countries should revise their policies and strategies regarding openness to trade, usage of external debt, and foreign aid. Various growth theories found foreign inflows an important factor for economic growth. Further accelerating these nations' economic growth will include the adoption and implementation of sound policies, the identification and removal of internal and external hurdles, and other related activities.