Impact of Foreign Direct Investment on Economic Growth: Empirical Evidence from Bangladesh

Abstract

Abstract:The study is conducted to find out the impact of foreign direct investment (FDI) on economic growth of Pakistan. Time series data is utilized which is comprises from 1981 to 2010, collected from the world data bank. Multiple regression technique is used in which gdp is dependent variable while foreign direct investment (FDI) and consumer price index (CPI) are independent variables. The result indicates that there is a positive relationship between the FDI and GDP and have a negative relationship with CPI. When FDI increase the GDP of Pakistan will positively affected by FDI.

The Impact of Islamic Banks and Takaful Companies on Economic Growth: A Case of Pakistan

“…FDI is found to be negatively linked with the growth of the economy which is also an empirically tested fact in the literature as reported by (Quazi, 2004;Eller, Haiss, & Steiner, 2005;K. Rahman, 2008;A. Rahman, 2015).…”

“…It may also cause crowding out of domestic capital and a rise in the imports of the host country, as, Foreign Investment' companies usually need high technology machinery and intermediate goods that may not be available in the host country (A. Rahman, 2015;Quazi, 2004;Eller et al, 2005;K. Rahman, 2008).…”

The impact of remittances on economic growth in Bangladesh, India, Pakistan and Sri Lanka

“…As a result, the net inflow of FDI may be negative if the amount of outflow is higher than the amount of new investment. A large number of factors are responsible for hampering positive outcomes from foreign direct investment in Bangladesh, like inadequate infrastructure, a slow-moving privatization process, an unskilled labor force, inefficient bureaucracy, political instability, and recurring natural disasters [32]. This finding can be related to the research of Azam [7], where the researcher found the negative and significant impact of FDI on economic growth.…”

Revisiting endogeneity among foreign direct investment, economic growth and stock market development: Moderating role of political instability

“…Tabssum and Ahamed (2014) examined the effects of domestic investment and FDI on economic growth, and reported that domestic investment is more significant than FDI for economic growth of the country. Rahman (2015) showed that FDI and growth has negative correlation. The mixed findings of the causal relationship between FDI and growth encouraged us to further investigate the short-and long-run nature of relationships between the variables.…”

“…Thirdly, studies on the effects of political instabilities on economic performances have ignored the moderating role of political instability on the relationship between economic growth and stock market development, relationship between economic growth and FDI, and relationship between FDI and stock market development (inter alia: Ahmed & Pulok, 2013;Aisen & Veiga, 2013;Alesina & Perotti, 1996;An et al, 2016;Asteriou & Siriopoulos, 2000;Brada et al, 2006;Liu et al, 2017;William, 2017). Similarly, the existing empirical studies mainly focused on the endogenous relationship among economic growth, FDI, and stock market development, whereas, the moderating effect of political instability on these relationships has been given less attention (inter alia: Ang & McKibbin, 2007;Bengoa & Sanchez- Robles, 2003; Brambila-Macias & Massa, 2011;Bristy, 2014;Calderona & Lin, 2003;Chakraborty & Basu, 2002;Handa & Khan, 2008;Haque & Fatima, 2011;Hassan, Sanchez, & Yu, 2011;Hsiao &Hsiao, 2006;Iamsiraroj, 2016;Jalil et al, 2010;Li & Liu, 2005;Masuduzzaman, 2014;Nain & Kamaiah, 2014;Pan & Mishra, 2016;Rahman, 2015;Raza & Jawaid, 2014;Raza, Jawaid, Afshan, & Abd-Karim, 2015;Sahu & Dhiman, 2011;Sehrawat & Giri, 2015;Soumare & Tchana, 2015;Uddin, Shahbaz, Arouri, & Teulon, 2014;Uddin et al, 2014;Freckleton, Wright, & Craigwell, 2012;Yildirm, Ozdemir, & Dogan, 2013;You...…”