Foreign Direct Investment (FDI) and Economic Reforms: The South Asian Perspective

Abstract

The purpose of this paper is to discuss some of the trends and patterns of foreign direct investment (FDI) inflow in four South Asian countries namely Bangladesh, India, Pakistan and Sri Lanka. The impact of major economic liberalization reforms on inward FDI will also be analyzed at the end. In this paper, panel data estimation is conducted in the empirical analysis of impact of economic reforms on FDI in South Asia (SA).

The paper is organized as it follows: In the first part, basic trends and patterns of FDI inflow for four major economies in SA will be discussed. In the second section, economic liberalization reforms and their impact on inward FDI of the above South Asian nations will be examined using panel data estimation. The final section concludes the paper.