The Impact of Foreign Direct Investment on Economic Growth in Bangladesh.

Abstract

FDI can greatly reduce poverty by fostering long-term economic prosperity; it is a special indicator of economic growth in developing nations. As a result, utilizing annual time series data from 1986 to 2022, the research's primary goal is to investigate the impact of foreign direct investment on Bangladesh's economic growth. This goal was accomplished by processing the qualitative and economic analysis. This study investigated the impact of FDI on economic development in Bangladesh by employing standard time-series econometric tools, namely, unit root tests to check stationarity and augmented autoregressive distributed lag (augmented ARDL) bounds testing approaches to check cointegration. The final results of the ARDL model discovered that exports and foreign direct investment had an impact on economic growth over the long and short terms. In order to boost the quantity of FDI that enters Bangladesh, the current study recommends that a sound foreign investment strategy and liberal trade policy be formed that protect foreign investment and the interests of the economy. Keywords: Foreign direct investment, Economic growth, sounds foreign investment strategy, liberal trade policy and Bangladesh.