Impact of infrastructure investment and foreign direct investment on economic growth of Bangladesh
Keywords:
economic growth, FDI, GFCFAbstract
The objective of this research paper is to evaluate the impact of Gross Fixed Capital Formation (GFCF) and Foreign Direct Investment (FDI) on economic growth of Bangladesh. Various time series analysis have been conducted to analyze the objective. The results reveal negative long-term relationship among GFCF, final consumption and economic growth. On the other hand, FDI shows positive long-term relationship with economic growth. Moreover, Granger causality test shows bidirectional relationship between economic growth and FDI. In Model 2, where FDI is endogenous suggest that GFCF negatively affect FDI. Research analysis suggests prioritizing policies on maintaining consistent FDI growth rather than growth of GFCF, which may not have a positive effect on economic growth.
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