Dynamics of Economic Growth, Investment and Trade Openness: Evidence from Bangladesh

Champa Bati Dutta, Mohammed Ziaul Haider and Debasish Das ()

South Asian Journal of Macroeconomics and Public Finance, 2017, vol. 6, issue 1, 82-104

Abstract: This article investigates the causal relationship among foreign direct investment, domestic investment, trade openness and economic growth in Bangladesh over the period 1976–2014. Unit root tests, cointegration methods and Granger causality tests in Vector Error Correction Model (VECM) framework are used to investigate the relationships. The results of Granger causality test based on a stable VECM support a unidirectional causality running from foreign direct investment to growth, domestic investment to trade openness, growth to trade openness and bidirectional causality between domestic investment and growth and foreign direct investment and domestic investment. The results support the investment complementarities in Bangladesh. JEL Classification: E22, F1, O40

Keywords: Economic growth; foreign direct investment; domestic investment; causality (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:smppub:v:6:y:2017:i:1:p:82-104

DOI: 10.1177/2277978717695150

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