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Foreign Direct Investment, Trade, and Economic Growth: An Empirical Analysis of Bangladesh

College of Business, Dillard University, New Orleans, LA 70122, USA
Scott College of Business, Indiana State University, Terre Haute, IN 47809, USA
Author to whom correspondence should be addressed.
Academic Editor: David O. Dapice
Economies 2016, 4(2), 7;
Received: 7 January 2016 / Revised: 29 March 2016 / Accepted: 31 March 2016 / Published: 15 April 2016
(This article belongs to the Special Issue Economic Development in Southeast Asia)
The study reveals that there is a relationship between foreign direct investments, trade, and growth rate of per capita GDP for Bangladesh with the help of annual time series data for 1973 to 2014. The Vector Error Correction Model (VECM) analysis shows that there is a long-term relationship between these variables. To check the validity of the VECM model, we did a few post-estimation diagnostic tests, and found that the residuals of the regressions have a normal distribution and do not show any auto-correlation. The trade and foreign investment variables have a significant impact on the growth rate of GDP per capita. Because FDI and trade are two important components of economic growth in Bangladesh, it is important to frame policies that promote growth and reduce the barriers for capital flows. View Full-Text
Keywords: foreign direct investments; economic growth; Bangladesh; trade foreign direct investments; economic growth; Bangladesh; trade
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Hussain, M.E.; Haque, M. Foreign Direct Investment, Trade, and Economic Growth: An Empirical Analysis of Bangladesh. Economies 2016, 4, 7.

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