Impact of FDI on Economic Growth of SAARC Nation

Abstract

Foreign Direct Investment (FDI) plays a vital role in economic growth of the countries. The purpose of the study is to find out the impact of FDI and Labor force participation on Economic Growth.. The present study analyses the impact of the FDI on economic growth of South Asian Association of Regional Cooperation countries by using the panel data for the period (2013-2022) extracted from World bank indicators. The log of GDP(Current US$) is selected as Dependent variable while Log of FDI, Labor Force Participation are chosen as Independent variable and Government expenditure on Education is chosen as control variable. Fixed Effect Model has been used to investigate the impact of FDI, Labor force on economic growth. It is evident from the study that LFP has positive impact and significant relationship with economic growth.