The impact of foreign direct investment on the economy of Bangladesh: A time-series analysis
This paper aims to discover the relationship between FDI and GDP in the context of Bangladesh. Using annual data of FDI, GDP, and export for the period of thirty-three years from 1986 to 2018, the paper finds that above three variables are non-stationary at level but stationary at first difference....
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2022-03-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1584.pdf
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| _version_ | 1818774778526302208 |
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| author | Mohammad Abdullah Al FAISAL Mohammed Saiful ISLAM |
| author_facet | Mohammad Abdullah Al FAISAL Mohammed Saiful ISLAM |
| author_sort | Mohammad Abdullah Al FAISAL |
| collection | DOAJ |
| description | This paper aims to discover the relationship between FDI and GDP in the context of
Bangladesh. Using annual data of FDI, GDP, and export for the period of thirty-three years from
1986 to 2018, the paper finds that above three variables are non-stationary at level but stationary
at first difference. No cointegration among three variables is found through the application of the
cointegration test. The Granger-causality test reveals that there are no causalities among the
variables except a causality running from FDI to GDP. The variance decomposition exhibits that
the forecast error variance of GDP is mainly explained by itself and FDI. A negative relationship
between FDI and GDP in the short-run is observed by the impulse response function. This finding
indicates that the absorptive capacity of Bangladesh is not sufficient enough to avail the FDI for
promoting economic growth. The paper renders some policy recommendations to ameliorate the
absorptive capacity of Bangladesh to exploit the FDI. |
| first_indexed | 2024-12-18T10:46:33Z |
| format | Article |
| id | doaj.art-2cc8527390444b129b3a8f65db55dae8 |
| institution | Directory Open Access Journal |
| issn | 1841-8678 1844-0029 |
| language | English |
| last_indexed | 2024-12-18T10:46:33Z |
| publishDate | 2022-03-01 |
| publisher | General Association of Economists from Romania |
| record_format | Article |
| series | Theoretical and Applied Economics |
| spelling | doaj.art-2cc8527390444b129b3a8f65db55dae82022-12-21T21:10:32ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86781844-00292022-03-01XXIX112314218418678The impact of foreign direct investment on the economy of Bangladesh: A time-series analysisMohammad Abdullah Al FAISAL0Mohammed Saiful ISLAM1 University of Chittagong, Bangladesh University of Chittagong, Bangladesh This paper aims to discover the relationship between FDI and GDP in the context of Bangladesh. Using annual data of FDI, GDP, and export for the period of thirty-three years from 1986 to 2018, the paper finds that above three variables are non-stationary at level but stationary at first difference. No cointegration among three variables is found through the application of the cointegration test. The Granger-causality test reveals that there are no causalities among the variables except a causality running from FDI to GDP. The variance decomposition exhibits that the forecast error variance of GDP is mainly explained by itself and FDI. A negative relationship between FDI and GDP in the short-run is observed by the impulse response function. This finding indicates that the absorptive capacity of Bangladesh is not sufficient enough to avail the FDI for promoting economic growth. The paper renders some policy recommendations to ameliorate the absorptive capacity of Bangladesh to exploit the FDI. http://store.ectap.ro/articole/1584.pdf gross domestic productforeign direct investmentvector autoregressivegrangercausality testvariance decompositionimpulse response function |
| spellingShingle | Mohammad Abdullah Al FAISAL Mohammed Saiful ISLAM The impact of foreign direct investment on the economy of Bangladesh: A time-series analysis Theoretical and Applied Economics gross domestic product foreign direct investment vector autoregressive grangercausality test variance decomposition impulse response function |
| title | The impact of foreign direct investment on the economy of Bangladesh: A time-series analysis |
| title_full | The impact of foreign direct investment on the economy of Bangladesh: A time-series analysis |
| title_fullStr | The impact of foreign direct investment on the economy of Bangladesh: A time-series analysis |
| title_full_unstemmed | The impact of foreign direct investment on the economy of Bangladesh: A time-series analysis |
| title_short | The impact of foreign direct investment on the economy of Bangladesh: A time-series analysis |
| title_sort | impact of foreign direct investment on the economy of bangladesh a time series analysis |
| topic | gross domestic product foreign direct investment vector autoregressive grangercausality test variance decomposition impulse response function |
| url |
http://store.ectap.ro/articole/1584.pdf
|
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