|Title: THE INTERACTION AMONG FOREIGN DIRECT INVESTMENT, GDP GROWTH, AND UNEMPLOYMENT RATE IN EMERGING ECONOMIES BEFORE AND AFTER THE COVID-19 PANDEMIC: A CASE STUDY ON BANGLADESH|
Fariza Binte Mahbub, Jannatul Ferdous Shetu, and Lamia Lazmi Khandker
This study examines Gross Domestic Product (GDP) growth, Net Foreign Direct Investment (FDI), and Unemployment growth and their relationships with each other; whether there’s a structural break for COVID-19; and how Bangladesh can use this information to ensure stable economic growth. Using a qualitative and quantitative approach, this paper uses time series analysis such as Augmented Dickey–Fuller (ADF) test, Johansen cointegration test, and Granger Causality are used to determine the underlining interconnection and any causal relationship among variables. The Bai-Perron test was performed to identify structural breaks in the series for COVID-19. Long-run equilibrium relationships exist between FDI and GDP growth and between FDI and the unemployment rate. There is a unidirectional relationship between the unemployment rate and GDP and between FDI and the unemployment rate. A structural break exists in all the variables that manifest the extent of the pandemic’s effect. This study proposes several policy reforms too. Even though most recent research has focused on the impact of FDI on both developed and developing countries’ economies during COVID-19; very few studies have focused specifically on Bangladesh, drawing on the impact of FDI on GDP, economic growth, and employment during then by examining the relationship and identifying a structural break among the variables.
|Keywords: Foreign Direct Investment, GDP Growth, Unemployment, COVID-19.|