TY - JOUR
T1 - Investigating the crowding effect of FDI on domestic investments
T2 - Evidence from Bangladesh
AU - Ahmed, Sayed Farrukh
AU - Mohsin, A. K.M.
AU - Rahman, Arifur
AU - Abdullah, Shamsul Nahar
AU - Onn, Choo Wou
AU - Islam, Mohammad Saiyedul
N1 - Publisher Copyright:
© 2024 The Authors
PY - 2024/5/30
Y1 - 2024/5/30
N2 - This study empirically investigates the crowding effect of Foreign Direct Investment (FDI) on domestic investments in Bangladesh, utilizing annual time series data from 1972 to 2022. Initially, unit root tests are conducted with and without considering structural breaks in the dataset. This study employs the Johansen test of cointegration to investigate the enduring association between the variables and utilizes the Vector Error Correction Model (VECM) to accommodate this relationship over the long term. Following the estimation of the VECM, formulas about the magnitude of the crowding effect (CE) are applied to examine the impact of FDI on domestic investment in Bangladesh. Results indicate that FDI positively influences domestic investments in both the short and long run.
AB - This study empirically investigates the crowding effect of Foreign Direct Investment (FDI) on domestic investments in Bangladesh, utilizing annual time series data from 1972 to 2022. Initially, unit root tests are conducted with and without considering structural breaks in the dataset. This study employs the Johansen test of cointegration to investigate the enduring association between the variables and utilizes the Vector Error Correction Model (VECM) to accommodate this relationship over the long term. Following the estimation of the VECM, formulas about the magnitude of the crowding effect (CE) are applied to examine the impact of FDI on domestic investment in Bangladesh. Results indicate that FDI positively influences domestic investments in both the short and long run.
KW - Crowding effect
KW - Domestic investments
KW - Foreign direct investment (FDI)
KW - Vector error correction model (VECM)
UR - http://www.scopus.com/inward/record.url?scp=85193453393&partnerID=8YFLogxK
U2 - 10.1016/j.heliyon.2024.e31092
DO - 10.1016/j.heliyon.2024.e31092
M3 - Article
AN - SCOPUS:85193453393
SN - 2405-8440
VL - 10
JO - Heliyon
JF - Heliyon
IS - 10
M1 - e31092
ER -