Culminating Project Title
Date of Award
Culminating Project Type
Applied Economics: M.S.
School of Public Affairs
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Keywords and Subject Headings
development, foreign aid, foreign direct investment, remittance, economics, South Asia
The total amount of money sent from the developed world to the developing world has always been increasing with no signs to slowing down. Foreign aid and remittance are at its highest levels ever recorded. Even with these large sums of money transfer, there still seem to be no consensus among economists regarding the effectiveness of external development finance and foreign exchange earnings (Foreign Direct Investment, foreign aid or remittance) in promoting economic growth. This paper attempts to identify an econometric model that properly portrays this relationship and analyze the effect of external development finance and foreign exchange earnings on economic growth in South Asia. A Fixed Effect panel model is developed using data of Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka ranging from 1960 to 2014. These findings suggest that only remittance have a consistent positive effect on growth, where as Foreign Direct Investment and foreign aid have varying effect dependent upon model specification.
Joshi, Nikhil, "The Effect of Foreign Direct Investment, Foreign Aid and International Remittance on Economic Growth in South Asian Countries" (2016). Culminating Projects in Economics. 7.