FDI Inflows and Current Account Evidence From BIMSTEC

Abstract

The liberalisation drive that swept across the globe post-1990s gave way to FDI in emerging as a catalyst of economic development for a majority of economic groups and nations. With the objective of realising economic development by transiting from debt flows to FDI flows, several economies tied up in regional groups in the Asian region to foster trade and investment sectors and other areas as well. In this regard, the BIMSTEC group came forth in 1997 as an initiative on the part of selected South Asian and South East Asian countries to collaborate and work together for the economic wellbeing of the member countries. The current account balance of the member nations and its nexus with inward FDI needs to be counted while forging over economic soundness of the participating nations. In this respect, the chapter attempts to search for evidences of causality among FDI inflows and current account balance across member countries of BIMSTEC group. The chapter utilises annual data for the member countries for a time frame ranging 1991-2014 from UNCTAD STATISTICS Database.