The impact of foreign direct investment in the economic growth of Bangladesh

Shah Mohammad, Habibul Hasan (2013). The impact of foreign direct investment in the economic growth of Bangladesh Master's Thesis, SCHOOL OF ECONOMICS, The University of Queensland.

       
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Author Shah Mohammad, Habibul Hasan
Thesis Title The impact of foreign direct investment in the economic growth of Bangladesh
School, Centre or Institute SCHOOL OF ECONOMICS
Institution The University of Queensland
Publication date 2013-11
Thesis type Master's Thesis
Supervisor Mohammad Alauddin
Total pages 91
Language eng
Subjects 14 Economics
Formatted abstract

The effect of FDI on economic growth of Bangladesh is examined in combination of selected policy variables (trade openness, institutional quality and inflation) and non-policy variables (foreign exchange reserve and gross fixed capital formation) using time series data covering the period of 1980-2011. All the variables are made stationary after first differencing and then ordinary least squares (OLS) method is applied to explore the relationship. OLS results revealed a significant positive relation of FDI and foreign exchange reserve with growth rate. These significant variables are then analyzed further using Error Correction Model (ECM), which can explore a long-run relationship even in presence of non-stationarity and autocorrelation in data. The empirical results of ECM revealed that FDI have a significant and unidirectional long-run equilibrium relationship on growth rate. Both theoretical and empirical findings suggest that Bangladesh should formulate FDI-led growth policies that will secure human capital development as well so that growth is sustained in the long-run.  Keywords: GDP, FDI, GFCF, Foreign exchange reserve, ECM and Bangladesh.


Document type: Thesis
Collection: UQ Theses (non-RHD) - UQ staff and students only
 
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Created: Mon, 23 Dec 2013, 09:44:14 EST by Yu-lin Huang on behalf of Scholarly Communication and Digitisation Service