Advances in Economics and Business Vol. 3(12), pp. 587 - 592
DOI: 10.13189/aeb.2015.031207
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Effects of Foreign Direct Investment on GDP: Empirical Evidence from Developing Country

Arafatur Rahaman ^1,*, Sumit Chakraborty ^2
1 School of Business Studies, Southeast University, Bangladesh
² Ahsanullah University of Science & Technology, Bangladesh

ABSTRACT

This empirical research is to analyze the causal relationship between foreign direct investment (FDI) and gross domestic product (GDP) mainly focused on Bangladesh. The main objective of the paper is to investigate existence and nature of the effect of FDI on GDP in Bangladesh from the perspective of developing country. The researcher applies cointegration test that confirmed the existence of long-run equilibrium relationship and Granger causality test assured the presence of uni-directional causality which runs from foreign direct investment to GDP. Findings of the study concluded that comparing to neighbour Asian countries FDI inflow is very low and Bangladesh should develop infrastructure, skill labor, shortage of power and electricity generation, investment friendly macroeconomic framework & also political stability to attract foreign investors significantly.

KEYWORDS
Foreign Direct Investment (FDI), Gross Domestic Product (GDP), Cointegration, Granger Causality

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Arafatur Rahaman , Sumit Chakraborty , "Effects of Foreign Direct Investment on GDP: Empirical Evidence from Developing Country," Advances in Economics and Business, Vol. 3, No. 12, pp. 587 - 592, 2015. DOI: 10.13189/aeb.2015.031207.

(b). APA Format:
Arafatur Rahaman , Sumit Chakraborty (2015). Effects of Foreign Direct Investment on GDP: Empirical Evidence from Developing Country. Advances in Economics and Business, 3(12), 587 - 592. DOI: 10.13189/aeb.2015.031207.