Does Foreign Direct Investment Accelerate Economic Growth for Bangladesh?

Abdullah Iftikhar

Abstract


The aim of this study is to explore the causality relationship between Foreign Direct Investment and economic growth in Bangladesh, which has liberalized foreign capital inflows especially after mid 1980s. Granger causality analysis was used in order to test the hypotheses about the presence of causality between Foreign Direct Investment and Economic Growth. The study, which used the yearly data covering the period between 1975-2009, showed causality relationship from Foreign Direct Investment to Economic Growth in Bangladesh. In other words, there is a one-way relationship between Foreign Direct Investment and Economic Growth and the direction of this relationship is from Foreign Direct Investment to Economic Growth.


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