Causal Relationship between Current Account Deficit and Foreign Direct Investment: An Empirical Analysis of Bangladesh

The causal association between foreign direct investment and current
account deficit has gained interest of researchers and policy makers all
around the world due to it’s consequences. While this paper examines
the co integration and causal relationship between current account deficit
and foreign direct investment in Bangladesh economy. For this research
we have taken into account annual data starting from 1980 to 2015.Our
results reveal that there is a unidirectional causality running from foreign
direct investment to current account deficit in context of Bangladesh.
That is there is causality between foreign direct investment and current
account deficit running from foreign direct investment to current account
deficit.

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