The Impact of Foreign Direct Investment on Economic Growth: From the Empirical Perspective of Bangladesh

Abstract

The aim of the research paper is to examine the impact of Foreign Direct Investment (FDI) on the Gross Domestic Product (GDP) or economic growth in Bangladesh. Four other independent variables: Exchange Rate, Interest Rate, Inflation and Fertility Rate were used as the control variable that can affect the GDP along with the main or principal independent variable, FDI in this research. The Ordinary Least Squares (OLS) model was used for the study. To run a time series regression, 30 years of secondary data from 1991 to 2020 were collected for one dependent and all the five independent variables from the official website of Bangladesh Bank and World Bank. The finding of the study indicates that there is a statistically significant positive impact of FDI on the GDP or economic growth in Bangladesh. The relationship among GDP and four other independent variables were developed as well based on the results for the regression.