Citation:Malalanayake, M.T.C.K.P. and Madurapperuma, M.W. (2018). The Impact of Foreign Direct Investment on Economic Growth in Sri Lanka. 4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka. p27
Date:2018
Abstract:
Foreign Direct Investment contributes to economic growth of many developed and
developing countries and it is considered as a key instrument which is more than flow
of capital. This study aims to identify the influence of foreign direct investment on
economic growth in Sri Lanka. Net foreign direct investment was used as
measurement of foreign direct investment and economic growth rate was used as
economic growth indicator. The study employed secondary data covering period of
1980-2017. Data were analyzed using Johansen’s co-integration test to examine the
long run relationship between foreign direct investment and economic growth in Sri
Lanka. Besides, the vector error correction (VECM) was employed to examine the
casual link between foreign direct investment and economic growth in Sri Lanka.
Findings of this study show that FDI inflow has positive and significant impact on
economic growth in long run and in the short run in Sri Lanka
