Foreign Direct Investment in SAARC Economies

Abstract

newline Economic growth of developing countries primarily depends upon the various socioeconomic factors such as level of output, rate of saving and investment, standard of living of people, per capita income, national income and finally on industrial development. The economic impact of foreign direct investment inflow towards SAARC individual countries varies from country to country at different time interval. For this a great deal of researchers have confronted the issues and produced their thoughts. However the major researches failed to effectively examine this relationship within a general macroeconomic framework. In the absence of such attempts this thesis aims to explore the impact of foreign direct investment inflow towards the growth framework of SAARC individual countries primarily on six economic indicators that are GDP, GDP Per capita, GNI, Export Growth, Financial position, Trade openness from year 1991 to 2012. MANOVA multivariate and Pearson correlation econometric technique have been employed with assuming the three categorical factor FDI Inflow, year and country as fixed factors to draw the results. The results of this thesis has proved that FDI inflow has positive and strong relationship with Real GDP, GNI and Export growth while FDI has negative and weak relationship with financial position and Trade openness in SAARC member countries at 5 percent and 1 percent level of significance. Moreover, among the three fix factors FDI inflow is country specific and year only FDI Inflow consistently affects the dependent variables most and year wise effect is less. newline newlineKeywords GDP, GDP Per capita, GNI, Export Growth, Financial position, Trade openness MANOVA technique. newline newline