Fdi and Its Impact on Gdp and Income Inequality in Bangladesh
FOREIGN DIRECT INVESTMENT AND ITS IMAPCT ON ECONOMIC GROWTH AND INCOME INEQUALITY:
A CASE FOR BANGLADESH
MD AHAD UDDIN
ID – 072249020
IN FULFILLMENT OF ECO 495 [SUPERVISED RESEARCH]
RESEARCH PAPER SUBMITTED TO
DR. AFM ATAUR RAHMAN
ASSOCIATE PROFESSOR, DEPARTMENT OF ECONOMICS
NORTH SOUTH UNIVERSITY
19TH SEPTEMBER 2011
ACKNOWLEDGMENT
I would like to take this opportunity to express my gratitude to All Mighty Allah and to my parents whose dedication and sacrifice have allowed me to undertake this research project. They took care of everything else while I concentrated solely on this research. I am highly indebted to my research supervisor, Dr. AFM Ataur Rahman who managed to allocate time despite his busy schedule as core a member of the faculty in the department of economics at NSU. His suggestions and expert advice regarding selection of the research topic and its methodology have been invaluable. I am also grateful to everyone who has helped with this research including my friends at North South University.
Foreign Direct Investment and its Impact on Economic Growth and Income Inequality : A Case for Bangladesh
Md Ahad Uddin
ABSTRACT
Foreign Direct Investment is viewed as a major stimulus for economic growth for developing countries like Bangladesh which lacks sufficient domestic financing. This paper is intended to empirically analyze this theoretical perspective and analyze the impact of FDI on Bangladesh’s economic growth and income inequality. Using time series data of FDI, GDP and other relevant variables, it was found that FDI inflow into Bangladesh did not show any direct significant impact on economic growth; however, it had a negative impact on income inequality, though this impact was found to be small.
Key words: FDI , economic growth, income inequality, Bangladesh.
Table of Contents
Acknowledgements…………………………………………………………………………2
Abstract………………………………………………………………………………………3
A CASE FOR BANGLADESH
MD AHAD UDDIN
ID – 072249020
IN FULFILLMENT OF ECO 495 [SUPERVISED RESEARCH]
RESEARCH PAPER SUBMITTED TO
DR. AFM ATAUR RAHMAN
ASSOCIATE PROFESSOR, DEPARTMENT OF ECONOMICS
NORTH SOUTH UNIVERSITY
19TH SEPTEMBER 2011
ACKNOWLEDGMENT
I would like to take this opportunity to express my gratitude to All Mighty Allah and to my parents whose dedication and sacrifice have allowed me to undertake this research project. They took care of everything else while I concentrated solely on this research. I am highly indebted to my research supervisor, Dr. AFM Ataur Rahman who managed to allocate time despite his busy schedule as core a member of the faculty in the department of economics at NSU. His suggestions and expert advice regarding selection of the research topic and its methodology have been invaluable. I am also grateful to everyone who has helped with this research including my friends at North South University.
Foreign Direct Investment and its Impact on Economic Growth and Income Inequality : A Case for Bangladesh
Md Ahad Uddin
ABSTRACT
Foreign Direct Investment is viewed as a major stimulus for economic growth for developing countries like Bangladesh which lacks sufficient domestic financing. This paper is intended to empirically analyze this theoretical perspective and analyze the impact of FDI on Bangladesh’s economic growth and income inequality. Using time series data of FDI, GDP and other relevant variables, it was found that FDI inflow into Bangladesh did not show any direct significant impact on economic growth; however, it had a negative impact on income inequality, though this impact was found to be small.
Key words: FDI , economic growth, income inequality, Bangladesh.
Table of Contents
Acknowledgements…………………………………………………………………………2
Abstract………………………………………………………………………………………3
References: Jensen and Rosas (2007) explored the relationship between FDI and income inequality in Mexico and they also found that increased FDI inflows are associated with decrease in income in inequality in Mexico’s states. Feenstra and Hanson (1997) using Mexican data from 1975 to 1988, found that the rising wage inequality in Mexico is caused by higher foreign capital inflows. Choi (2006) using pooled Gini coefficient from 1993 to 2002 data for 119 countries from World Development Indicators 2004, World Bank, found that income inequality increases as FDI stocks as a percentage of GDP increase.