Abstract
This study explores the asymmetric effects of financial development and foreign direct investment (FDI) on economic growth in Nepal, employing the nonlinear autoregressive distributed lag (NARDL) model. The analysis reveals significant asymmetries in the effects of FDI and financial broadening in the economy by distinguishing between positive and negative shocks, the outcome indicates that positive shocks in financial sector growth significantly boost the economy, while negative shocks have a less pronounced and statistically insignificant effect. Similarly, positive shocks in FDI positively influence GDP per capita growth, whereas negative shocks are statistically insignificant. The robustness of these findings shows stable model parameters. The study underscores the importance of proactive policy measures to harness the positive impacts of financial development and FDI, thereby fostering sustained economic growth in Nepal. These insights contribute to the broader literature by highlighting the need for asymmetric analysis in understanding the complex dynamics of financial development, FDI, and economic growth in developing economies.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
