An association amongst Foreign Direct Investment (FDI), Interest rate and Economic growth of Bangladesh from 1978 to 2020

Shahnaz Parvin
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Shahnaz Parvin: Department of Finance & Banking (FIB), Faculty of Business Studies, Hajee Mohammad Danesh Science and Technology University, Dinajpur-5200, Bangladesh.

International Journal of Science and Business, 2021, vol. 5, issue 11, 19-28

Abstract: This study aims at analyzing the effect of the Foreign Direct Investment (FDI) and interest rate on the Gross Domestic Product (GDP) as well as the nature of them in Bangladesh from 1978 to 2020 years. For accomplishing the objectives, this study uses the Auto Regressive Distributed Lag (ARDL) co-integration approach. The bound test provides a long run relationship of the explanatory variables with the dependent variable. The result of error correction representation of the short run dynamics reveals that a self –adjusting mechanism of -0.452 exists. In the long run, FDI has a positive impact on the GDP which is statistically significant at 1% level. On the contrary, FDI, interest rate and the lagged GDP have significant influence on the economics growth which is also statistically significant (p

Keywords: Foreign Direct Investment (FDI); Interest Rate; Gross Domestic Product (GDP); Economics Growth; Auto Regressive Distributed Lag (ARDL) (search for similar items in EconPapers)
Date: 2021
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