Effect of Fdi, Remittance and Aid on Gdp of Bangladesh-an Econometric Analysis
Introduction
Foreign Direct Investment (FDI) is a key component of the global capital flow that entails world economic growth through investment opportunities. As an investment tool FDI also affect the aggregated growth of the host country. FDI as a share of GDP has become the largest source of capital moving from developed nations to developing ones. FDI inflow usually involves starting new production facilities namely Greenfield investments or purchase of existing business through mergers and acquisitions. In developing nations, equity investments as a percentage of gross national income have been growing in recent years.
In spite of FDI’s potential to impact on know-how, output and investment, development economists have unexpectedly not interested in finding a strong causal link to economic growth. However, some studies have identified a positive impact, but only if the country has human capital and infrastructural support.
Literature Review
The Gross Domestic Product (GDP) is a measure of a country's aggregated economic output. It is the final market value of all goods and services finally produced within the territory of a country in a particular year. GDP can be estimated in different ways and in different measurements which would give results with different implication. According to Sullivan and Steven (2003) GDP can be measured in three ways such as the product (or output) approach, the income approach, and the expenditure approach.
The expenditure approach measures that all of the product must be bought by somebody and thus the value of the total product must be equal to total expenditures for purchase. Product approach aggregates the outputs of every business to get the total. The income approach measures the sum of all producers' incomes based on the principal that the incomes of the productive factors must be equal to the value of their product.
Foreign direct investment (FDI) is the long term capital investment by a country into another
Foreign Direct Investment (FDI) is a key component of the global capital flow that entails world economic growth through investment opportunities. As an investment tool FDI also affect the aggregated growth of the host country. FDI as a share of GDP has become the largest source of capital moving from developed nations to developing ones. FDI inflow usually involves starting new production facilities namely Greenfield investments or purchase of existing business through mergers and acquisitions. In developing nations, equity investments as a percentage of gross national income have been growing in recent years.
In spite of FDI’s potential to impact on know-how, output and investment, development economists have unexpectedly not interested in finding a strong causal link to economic growth. However, some studies have identified a positive impact, but only if the country has human capital and infrastructural support.
Literature Review
The Gross Domestic Product (GDP) is a measure of a country's aggregated economic output. It is the final market value of all goods and services finally produced within the territory of a country in a particular year. GDP can be estimated in different ways and in different measurements which would give results with different implication. According to Sullivan and Steven (2003) GDP can be measured in three ways such as the product (or output) approach, the income approach, and the expenditure approach.
The expenditure approach measures that all of the product must be bought by somebody and thus the value of the total product must be equal to total expenditures for purchase. Product approach aggregates the outputs of every business to get the total. The income approach measures the sum of all producers' incomes based on the principal that the incomes of the productive factors must be equal to the value of their product.
Foreign direct investment (FDI) is the long term capital investment by a country into another