Relationship between Foreign Direct Investment and Economic Growth Case Study of Nepal

Abstract

This study examines the serial correlation ship between foreign direct investment and economic growth of Nepal in terms of GDP for the period of 1983-2007.This study has been carried out with log and non log-values using Durbin-Watson Test and Cochrance-Orcutt method. The result shows that even though marginal effect seems to be because of presence of auto-correlation, without presence of auto-correlation FDI does not adequately describe the GDP.