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Does FDI intensify Economic Growth? Empirics from Bangladesh

Author

Listed:
  • Ahamad, Mazbahul Golam
  • Tanin, Fahian
  • Ahmed, Zahir Uddin

Abstract

Inward FDI to the middle-income countries has the evidence as a major stimulus to the economic growth; conventionally at export-oriented manufacturing sector. In point of fact, basic macro fundamentals like as growth of gross domestic capital formation, foreign reserve, infrastructure etc. accelerates the FDI inflows. This study reviews the long-run trend on the time scale of FDI to Bangladesh over the period 1975- 2006 and major factors determining foreign companies' decisions to invest, in associated with economic growth. Contents of the paper describe the theoretical development and extensive literature review to find out the appropriate variables to deter the foreign direct investment from time series data. On the basis of intricate link between foreign direct investment and growth, all explained determinants enhance the facilitation, turnover, and return in FDI concentrated sectors that promote long-term sustainable growth with specific shortcomings, directly or indirectly, in our labor-intensive economic activity. Reduced government’s ineffectiveness along with supporting policy framework makes Bangladesh as an attractive destination of FDI, that has a positive spillover and significant impacts affect over time through dynamic effects on economic growth.

Suggested Citation

  • Ahamad, Mazbahul Golam & Tanin, Fahian & Ahmed, Zahir Uddin, 2010. "Does FDI intensify Economic Growth? Empirics from Bangladesh," MPRA Paper 21022, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:21022
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    File URL: https://mpra.ub.uni-muenchen.de/22915/1/MPRA_paper_22915.pdf
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    References listed on IDEAS

    as
    1. Mottaleb, Khondoker Abdul, 2007. "Determinants of Foreign Direct Investment and Its Impact on Economic Growth in Developing Countries," MPRA Paper 9457, University Library of Munich, Germany.
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    Cited by:

    1. Khatun, Fahmida & Ahamad, Mazbahul, 2015. "Foreign direct investment in the energy and power sector in Bangladesh: Implications for economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1369-1377.

    More about this item

    Keywords

    FDI; Economic Growth; Bangladesh;

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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