Abstract:
1. Introduction
Economic Growth (EG) is the most important indicator that reflects the
sustainability of a country. Foreign Direct Investments (FDI) pump capital
flows to increase EG. Furthermore, Human Capital (HC) assists in
improving the gross domestic production, which is the key indicator of EG.
Moreover, Trade Openness (TO) and Inflation(I) were the control variables.
This study addresses the unsolved issue of whether FDI and PG affect the
EG in South Asian middle-income countries, which was an unsolved puzzle.
Therefore, this study attempts to examine the effect of FDI, HC, I, and TO on
EG in South Asian Countries.
2. Research Methodology
Yearly data for 12 years from 2009 to 2020 were collected for 6 South
Asian countries were used as the sample, and the long panel data analysis
techniques: Pooled Mean Group (PMG), Mean Group (MG), and Dynamic
Fixed Effect (DFE) were utilized as key techniques. The Hausman test was
done to find the best-fitted model.
3. Findings and Discussion
Findings revealed that FDI and TO have a positive long-term effect on EG.
However, long-term Population Growth (The proxy for HC) and Inflation
show a negative association with EG.
4. Conclusion and Implications
The findings indicated that countries need to focus on attracting more
foreign investments and need to engage in more trade openness activities.
However, there should be good strategies to utilize human capital for
productive sectors and a stable inflation level to achieve sustainable
economic growth
