Foreign Trade, Foreign Direct Investment and Economic Growth in Nepal

Chhetri, Hom Bahadur

doi:10.3126/jjis.v11i1.51648

Cited by 2 publications

(1 citation statement)

References 12 publications

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“…FDI in Nepal leads to economic growth through long-term capital, technology transfer, employment opportunities, managerial skills, technology diffusion, and innovation (Chhetri, 2022). It is said that FDI has made a significant impact on Nepali economy, with positive relationships observed between FDI, GDP, and employment, Foreign Direct Investment, Export and Economic Growth: An Evidence from Nepal although the need for selective strategies, weak information base, and the absence of an effective monitoring system are the major challenges (Kharel & Kharel, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

Foreign Direct Investment, Export and Economic Growth: An Evidence from Nepal

Subedi,

Kharel,

Poudel

2024

Acad. J. Hum. Soc. Sci.

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The aim of this paper is to analyze and evaluate the present status of foreign direct investment (FDI) in Nepal concentrating economic growth and export boost. Developing nations like Nepal derive significant advantages from foreign investment, fostering economic advancement through the attraction of external capital, entrepreneurial skills, expanding market spaces, and technology transfer. Nepal has witnessed an upsurge in FDI since the 1990s, primarily attributable to the implementation of liberal economic policies by the government. The enactment of the Foreign Investment Technology Transfer Act (FITTA) has further sustained the investment environment in Nepal. This paper analyzes and evaluates the role of FDI in driving Nepal's economic growth and export activities. Employing correlation analysis and an ordinary linear regression model, the impact of FDI on Gross Domestic Product (GDP) and exports is measured. Given the documented FDI inflows since the 1990s, this research concentrates on the period from 2010/11 to 2022/23 to measure FDI's impact. The findings of this investigation reveal a positive correlation between FDI, GDP and the country's export growth.

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Section: Literature Reviewmentioning

confidence: 99%

Foreign Direct Investment, Export and Economic Growth: An Evidence from Nepal

Subedi,

Kharel,

Poudel

2024

Acad. J. Hum. Soc. Sci.

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Impact of foreign trade and foreign direct investment on economic growth: Empirical insights from Nepal

Kumar Dahal,

Bhattarai,

Bahadur Budhathoki

2024

Problems and Perspectives in Management

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This study aims to examine the impact of foreign trade and foreign direct investment on Nepal’s long-term economic growth. It uses secondary data from 1989/90 to 2021/22 collected from various economic surveys of the Ministry of Finance of Nepal. Descriptive and explanatory research designs are used in this study. The trace, max-eigen tests, and fully modified least square methods search the long-run co-integration and impact between response and predictor variables. Trace and max-eigen tests consistently point toward the long-run co-integration between dependent (gross domestic product) and independent (import, export, total trade, and foreign direct investment) variables. Exports and imports are found to be negative and statistically significant to explain Nepal’s economic growth. One unit increase in exports results in a 0.748 unit decrease in Nepal’s economic growth. Similarly, total trade volume and foreign direct investment positively impact economic growth. Each unit increase in foreign direct investment results in a 0.0036 unit increase in GDP in Nepal. Foreign trade has a multiplier effect on Nepal’s GDP growth. The 76.35 percent variation in economic growth depends upon total foreign trade volume, exports, imports, and foreign direct investment. To promote sustainable economic growth, policymakers should prioritize policies encouraging increased total foreign trade and foreign direct investment while carefully managing the potential negative impact of excessive reliance on import dynamics.

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Foreign Trade, Foreign Direct Investment and Economic Growth in Nepal

Cited by 2 publications

References 12 publications

Foreign Direct Investment, Export and Economic Growth: An Evidence from Nepal

Foreign Direct Investment, Export and Economic Growth: An Evidence from Nepal

Impact of foreign trade and foreign direct investment on economic growth: Empirical insights from Nepal

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