The purpose of this study is to analyze the dynamic causal relationship between foreign direct investment (FDI), gross domestic product (GDP) and trade openness (TO) on a set of five selected South Asian countries.
This study used newly developed bootstrap auto regressive distributed lags (ARDL) cointegration test to examine the long-run relationship among FDI, GDP and TO for selected South Asian countries for 1975–2016.
The economic growth (EG) is significantly related to TO for Bangladesh, India and Sri Lanka and the expansion of TO is crucial for growth in these countries. The results show that all countries (except Bangladesh) found the existence of long-run cointegration between FDI, GDP and TO, whereas FDI is a dependent variable. These results concluded that FDI and TO are contributing to EG in these selected countries.
This study is one of the first attempts to investigate the causal relationship and address the short and long dynamic among FDI, GDP and TO regarding five south Asian countries such as Bangladesh, India, Nepal, Pakistan and Sri Lanka.
The authors are grateful to the anonymous referees and the editorial team of the journal for their beneficial suggestions to improve the quality of the article.Funding: The authors have not received any financial support for the research, authorship and publication of this article.Declaration of conflicting interests: The authors declared no potential conflicts of interest concerning the research, authorship and publication of this article.
Saleem, H., Shabbir, M.S. and Bilal khan, M. (2020), "The short-run and long-run dynamics among FDI, trade openness and economic growth: using a bootstrap ARDL test for co-integration in selected South Asian countries", South Asian Journal of Business Studies, Vol. 9 No. 2, pp. 279-295. https://doi.org/10.1108/SAJBS-07-2019-0124
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