Does Foreign Direct Investment Enhance Economic Growth: Insight from Bangladesh

Document Type: Research Paper

Authors

Department of Business Administration, Mawlana Bhashani Science and Technology University, Santosh, Tangail, Bangladesh

Abstract

This study deals with foreign direct investment and its impact on economic growth in the context of Bangladesh. The main objective of our study is to evaluate the impact of FDI on the economy of Bangladesh based on the secondary data covering year 2013-2017. This study considers FDI as a dependent variable and GDP, export and investment as independent variables and is used as the indicators of economic growth. Several statistical techniques namely correlation, regression, descriptive analysis and ANOVA test are conducted to identify the association between dependent and independent variables. The result reveals that FDI has significant and positive impact on Export, GDP and investment. Therefore, it can be concluded from the study that foreign direct investment has significant and positive impact on the economic growth of Bangladesh. Foreign direct investment is a vital factor to ensure a country’s overall economic development especially for a developing country like Bangladesh because there are big opportunities to grow FDI in Bangladesh as Bangladesh is a small but labor oriented country. Our economic growth is influenced positively by its foreign direct investment inflows greatly. Moreover, policy makers and FDI analysts will be able to realize which sectors should be given more priority for promoting FDI among all economic sectors.

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