Last few decades have seen wide-ranging reforms in South Asia. Among the vital industrial reforms is allowing unbridled foreign direct investment (FDI) in many sectors, apart from tariff rationalization and other product market reforms. The outcome of these reforms is increased growth of these countries through direct benefits of FDI and indirectly through crowding in of domestic investment. Fast growth of economies also tends to attract more FDI, as the growing market raises the profitability of the investment. Under this backdrop, this article has two objectives: (a) to see if there is any structural change in the growth of South Asian countries, and (b) what role FDI has played in this structural change. For the first objective, the study employs endogenous ‘structure-break’ tests on annual GDP data for the 58 years from 1960 to 2017 to find the structural change in the economy. For the second objective, we estimate a three-way dynamic causal relationship between investment (FDI and gross fixed capital formation [GFCF]) and growth (GDP) for four key South Asian countries—India, Bangladesh, Sri Lanka and Pakistan. For the analysis, we apply the bounds tests (autoregressive distributed lag [ARDL]) approach to cointegration for the period. The results show different break years for each of the South Asian country. The causal relationship between investment and growth is not uniform for the chosen countries. We find FDI has not resulted in long-term growth in any of the selected countries. Results also show that FDI has not crowded in domestic investment in most of these countries.

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增长与投资：对南亚国家关系的检验

近几十年来，南亚进行了广泛的改革。除关税合理化和其他产品市场改革外，重要的工业改革还包括允许在许多部门实行不受限制的外国直接投资（FDI）。这些改革的结果是，通过外国直接投资的直接利益，以及通过拥挤国内投资而间接增加了这些国家的增长。经济的快速增长也倾向于吸引更多的外国直接投资，因为不断增长的市场提高了投资的利润率。在这种背景下，本文有两个目标：（a）看看南亚国家的增长是否发生任何结构性变化，以及（b）FDI在这种结构性变化中发挥了什么作用。为了第一个目标，该研究对1960年至2017年这58年间的年度GDP数据进行了内生的“结构破坏”检验，以发现经济的结构变化。对于第二个目标，我们估计了四个主要南亚国家（印度，孟加拉国，斯里兰卡和巴基斯坦）的投资（FDI和固定资本形成总额（GFCF））与增长（GDP）之间的三向动态因果关系。为了进行分析，我们将边界检验（自回归分布滞后[ARDL]）方法应用于该期间的协整。结果显示，每个南亚国家/地区的休息年不同。在选定的国家中，投资与增长之间的因果关系并不统一。我们发现外国直接投资并没有导致任何选定国家的长期增长。