A Time Series Analysis of Foreign Direct Investment and Economic Growth: A Case Study of Nepal

Abstract

This study has been carried out to find out the linkage between FDI and economic growth for Nepal over the period 1980-2006; using the Granger Causality test, Unit root test and Co-integration test. The results show that there exit a long term relationship between the variable and direction of causality runs from Foreign Direct Investment to the Gross Domestic Product.