Foreign Direct Investment between Bangladesh and ASEAN: An Assessment and Strategic Directions

Hau Trung Nguyen, Thuy T Dang, Nguyen Thi Thu Huong and Tran Hoang Minh
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Hau Trung Nguyen: Central Commission for Policy and Strategy, Hanoi, Vietnam.
Thuy T Dang: Vietnam Academy of Social Sciences, Hanoi, Vietnam.
Nguyen Thi Thu Huong: Hanoi Open University, Hanoi, Vietnam.
Tran Hoang Minh: Lac Hong University, Dong Nai, Vietnam.

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Abstract: This paper offers a comprehensive assessment of foreign direct investment (FDI) between Bangladesh and the Association of Southeast Asian Nations (ASEAN) by examining historical trends, key drivers, barriers, and strategic implications for the period 2015-2024, while also providing policy-relevant recommendations to strengthen bilateral economic cooperation. Adopting a qualitative and descriptive research design, the study draws on a focused literature review of major international investment theories, particularly the Eclectic Paradigm (OLI Framework), Internalization Theory, and the Product Life Cycle Theory, together with secondary data from official sources such as Bangladesh Bank, the ASEAN Secretariat, UNCTAD, and the World Bank. In addition, an integrated SWOT and TOWS matrix is used to assess the strategic position of the Bangladesh-ASEAN investment relationship and to formulate policy and business directions. The findings reveal a marked asymmetry in FDI flows: Bangladesh's modest FDI to ASEAN is strategically concentrated in logistics, IT, and textiles, while ASEAN's substantially larger FDI into Bangladesh, led by Malaysia and Singapore, targets energy, telecommunications, and manufacturing. Growth opportunities stem from China+1 diversification, RCEP, and the digital economy; however, regulatory barriers, infrastructure gaps, and the absence of a Free Trade Agreement (FTA) or Bilateral Investment Treaty (BIT) remain major constraints. The article contributes to the literature by combining classical FDI theories with updated bilateral evidence and by translating these findings into a strategic policy matrix tailored to the Bangladesh-ASEAN corridor. Guided by the Eclectic Paradigm, the study recommends prioritizing negotiations on an FTA/BIT, strengthening investment facilitation mechanisms, and encouraging firms to leverage digital platforms and integrate more deeply into regional value chains.

Date: 2026-04-03
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Published in Journal of Economics and Trade, 2026, 11 (1), pp.331-341

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