The Role of Export and Foreign Direct Investment in the Economic Growth of Bangladesh: A Time Series Analysis
Project Description:
This project examines the relationship between foreign direct investment (FDI), exports, and economic growth in Bangladesh, with a particular focus on how major economic changes and global shocks have influenced the country’s development. Using annual data from 1986 to 2022, the study analyzes both short- and long-term relationships among these key economic indicators using advanced time-series econometric techniques.
The research investigates whether exports and FDI have contributed to Bangladesh’s economic growth and assesses the importance of events—such as Bangladesh’s transition to lower-middle-income status, the COVID-19 pandemic, and the Russia–Ukraine conflict—for these relationships. By incorporating structural changes into the analysis, the study provides a more comprehensive understanding of how both domestic reforms and external shocks shape the country’s growth trajectory.
The findings show that exports have been a major driver of economic growth in both the short and long run, reinforcing the importance of export-led development. While FDI has the potential to support growth, its impact depends on broader factors such as the investment climate, infrastructure, and institutional quality. Based on these findings, the study offers evidence-based policy recommendations to strengthen export competitiveness, improve the effectiveness of FDI, and enhance Bangladesh’s long-term economic resilience.
Through this project, CPER demonstrates its commitment to producing high-quality, policy-oriented research that helps policymakers better understand the factors driving sustainable economic growth and supports informed economic decision-making in Bangladesh.
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