Foreign Direct Investment, Foreign Trade And Economic Growth:A Study On Bangladesh

The study reveals that there is a connection and influence between foreign direct investment and trade to accelerate the economic growth of Bangladesh with the assistance of yearly time series data over a period of forty-one years from 1976 to 2016 by using co-integration method.FDI and Trade variables have a considerable effect on the growth rate of GDP per capita,because in Bangladesh,FDI and Trade are two essential components on economic growth;it is reducing the barriers of capital flows and frame policies that promote growth.The present situation of FDI in Bangladesh is still not in a satisfactory level.Foreign direct investment enables a capital-poor country like Bangladesh to build up capital,industrial development,economic transition,business liberalization and macro-economic growth story over the last decade.The effectiveness of the assessment framework is one need,alongside changes to promote monetary administration,and improve the business condition.In addition,policies that remove red tape and simplify the trade regime should be put in place.Factors which are affecting FDI and Trade in Bangladesh are weak infrastructure,lack of skilled labor and technological advancement,political instability and bureaucratic difficulties.Compared to the last decade,Bangladesh has been experiencing considerable increase on international trade in recent years.With appropriate complementary policies,trade can contribute on a sustained basis to productivity growth,adequate employment opportunities and increased consumer choice.Global economic environment changes which reflect in widening and escalating international linkage in FDI and trade.The export of Bangladesh mostly relies upon some conventional merchandise;its exportable items are being limited.Since last two decade,government and concerned authorities are emphasizing on readymade garments,frozen foods,agricultural products and so on.Export can led the initial stage of growth,later on dependence on FDI might be realistic option.According to the results,the contribution of Trade to enhance the economic growth of Bangladesh is incredibly significant than FDI.However,availability of plentiful resources,skilled and cheap labor forces,stable political environment,effective monetary policy,advancement of infrastructure and suitable strategic planning to stimulate FDI might be able to create favorable ambiance to attract higher foreign direct investment in Bangladesh.