Theoretical and Applied Economics
No. 2 / 2019 (619), Summer
Foreign direct investment and total factor productivity in South Asia
Western Sydney University, Australia
Mamta CHOWDHURY
Western Sydney University, Australia
Girijasankar MALLIK
Western Sydney University, Australia
Abstract. This study attempts to find the effect of foreign direct investment on total factor productivity (TFP) for the four major South Asian economies namely Bangladesh, Pakistan, India and Sri Lanka considering other variables such as human capital, trade openness, government expenditure and CPI as significant determining factors for TFP. The results suggest that FDI is an important determinant of TFP in South Asian region and has a significant positive impact. FDI, trade openness, government expenditure and inflation all affect TFP in the long run for all the countries under study. However, the effect of human capital on TFP in case of Bangladesh’s and Sri Lankan economy is negative. South Asia needs to promote intra-regional trade and economic policies to increase foreign investment. The countries under study are labor intensive economies and labor productivity in the region can be improved through specialized skill development programs.
Contents
The education and training. Priorities of the European Union
Posted offers in exogenous networks: A theoretical application and experimental results
The role of Japan in the development of emerging markets in Asia. Key lessons learned for China
Empirical examination of the stability of expectations – Augmented Phillips Curve for developing and developed countries
The causality between economic growth and stock market in developing and developed countries: Toda-Yamamoto approach
Government failure vs. Market failure. The implications of incomplete information
Foreign direct investment and total factor productivity in South Asia
The effects of political and financial risks on foreign direct investments to the MENAT countries
Exploring the nexus between macroeconomic variables and stock market returns in Germany: An ARDL Co-integration approach
Income inequalities and economic convergence in CEE countries
Exchange rate regimes and its impact on growth: An empirical analysis of BRICS countries
Dynamics of business cycle and long-term economic growth of Pakistan
Per capita gross domestic product and welfare of Gabonese households: A VAR model with exogenous hypothesis
Co-integration with regime shift between government expenditure and poverty reduction in Algeria
Trade in a two sector endogenous growth model with two accumulating factors
What discriminates the welfare outcomes of children in India. A multiple discriminant analysis in selected states