FDI and Bangladesh: A Study of South Asian Territories

Document Type: Research Paper

Authors

1 Huazhong University of Science and Technology, Wuhan, Hubei, P. R. China

2 Department of Accounting and Information Systems, Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj, Bangladesh

3 Department of Management, Govt. M. M. Ali College, Kagmari, Bangladesh

Abstract

Foreign Direct Investmentplays a crucial role in the economy of developing countries like Bangladesh through accelerating Gross Domestic Product (GDP), export and domestic investment followed by overall economic growth. The present scenario of FDI in Bangladesh in not still satisfactory enough but given the availability of abundant resources, skilled and cheap labor forces, a stable political atmosphere, effective monetary and fiscal policy, improvement of infrastructure and long term strategic planning to stimulate FDI might be able to make the condition favorable to attract foreign investment in Bangladesh. South Asian countries need to improve their domestic investment, exports and infrastructure facilities, along with more foreign investment, to achieve higher growth. This report analysis of FDI flows to south Asian countries reveals that there has been an increasing trend of FDI into South Asian countries. Findings analysis suggest that FDI has a positive impact on export growth through its positive spillovers for South Asian countriesFDI in South Asia is mostly concentrated in manufacturing and services. Despite some policies reforms, Bangladesh could not attract handsome flow of FDI as yet. Furthermore, the lion’s share of FDI is being repatriated. The main focus of this paper is to reveal how attractive the position of Bangladesh in south Asian countries. We find from the report that Bangladesh hold the second position in FDI but not in attractive position. The paper also analyses the problems and prospects of FDI in Bangladesh. The study also provides some remedies to solve the problems. 

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