Electricity Generation, Output, Trade Openness & Foreign Direct Investment nexus in Bangladesh: An Empirical Analysis

Ayesha Tasnim and Sakib Bin Amin

As the world is becoming more of a global village, Bangladesh is also having its fair share of growth through technological advancement, development in energy sector, open economy and thus attracting foreign investors in the process. A close observation may reveal a causal relationship between electricity generation, trade openness, Foreign Direct Investment and output, though no attempt has been made to explore such nexus in Bangladesh. Hence, this study aims to investigate the existence and direction of causality among the variables electricity generation, trade openness, Foreign Direct Investment and output in Bangladesh over the period 1980-2013. The findings show a long run cointegrating relationship among these variables. The inferences drawn from the study imply adoption of energy growth policies as important policy implication.