THE EFFECT OF FOREIGN DIRECT INVESMENT ON ECONOMIC GROWTHH OF SAARC COUNTRIES

Abstract

Purpose: The research investigates the effect of foreign direct investment on economic growth in SAARC countries. Multiple regression models are used to analysis the relationship of FDI and GDP. From 2001 to 2013 used this time period data to identify the level of significance .Correlation and regression analysis were used to explore the relationship between them. Methodology: The relationship between the foreign direct investments and gross domestic product identify level of significance with the help of linear regression model. In this model GDP is dependent variable and FDI is independent variable Findings: The results show, the overall model significant with affirmative and the effect of FDI on GDP is significant and shows positive relationship between FDI and GDP. Implications: Two see the effect of foreign direct investment on economics growth of SAARC countries have a significant influence on decisions of the economist of SAARC countries. FDI can serve as a way of transfer of knowledge and technology and adds value to the human capital. FDI accelerate economic growth (GDP) in SAARC countries by increasing opportunities of employment, aggregate productivity and the outflow of exports.