From Ashes to Achievements: Corruption is pulling back one of the achievement tools (FDI inflows) in Bangladesh


Shapan C. Majumder

Farjana Layla

Journal: Bangladesh Journal of Political Economy

(pp: 157-180) | Doi No: http:/



To draw the success story of Bangladesh in 100 years, Foreign Direct Investment will be one of the ‘blood drops’ as it provides many opportunities; creates employment, shares knowledge, increases specialisation and opens up more windows for regional and global trade, that are imperative to make a well-developed economy but the scenario of inward FDI in Bangladesh is not at a satisfactory level. Corruption is one of the drawbacks of this failure, while trade openness accelerates the amount of FDI inflows. This study is based     on secondary data from 1986 to 2016.  To  examine the short-run and long-  run impact of corruption and trade openness, Auto Distributed Lag (ARDL) bound test approach is used. The results reveal that in the long-run GDP, trade openness positively impacts FDI inflows, and corruption negatively affects  FDI inflows in Bangladesh. Antithetically, in the short-run only trade openness positively prolongs the inward FDI. The empirical results are confirmed by robustness checking.




Md. Anishur Rahman


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