Creating a FDI friendly economy: An analysis of selected South Asian countries

Abstract

This paper studies the impacts that Economic Freedom and GDP of four South Asian countries (Bangladesh, India, Pakistan and Sri Lanka) have in attracting FDI. This study was conducted to examine whether FDI had a positive relationship with the other two independent variables. Secondary data had been collected from the World Bank and Heritage Foundation. For appropriate model selection, the Hausman test has been conducted which renders evidence for the presence of a random effect. This paper had a critical observation of Economic Freedom and vividly discussed it. The emphasis had been put to the fact whether Economic Freedom improved in the countries selected and how they had been related on the FDI.