Received: 15 Nov 2018 , Published: 22 November 2018
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|1||MF. Mohamed Marsook|
Keywords; Economic, Social, Infrastructure, FDI, Sri Lanka, Linear, Log Model, EI, SI
The purpose of this study is to investigate the role of investment in both economic and social infrastructures on to inflow of Foreign Direct Investment (FDI) to Sri Lanka. Sri Lanka is one of the developing country and which has first nation adopted open economic policy in South Asia Region. Sri Lanka explores the ways to attract FDI to have many benefits including supplementary to domestic capital. In this study, test is based on secondary data of Investment in Economic and Social Infrastructures (EI and SI) and Foreign Direct Investment Inflows from 1990 to 2017. This study used four econometric models such as Linear- Linear Model, Linear – Log model, Log –Log model and log- linear models of dependent variable, FDI inflows and independent variables of Investment in Economic Infrastructure and Social Infrastructure in order to identify dynamic long run co integration between Inflow of Foreign Direct Investment and its independent variables. The test found out that there is significant relationship between investment in both economic and social infrastructures and Inflow of FDI to Sri Lanka. Policies are suggested to increase local or foreign investment in both Economic and Social Infrastructures in the country along with other favourable determinants in order to attract FDI in future.
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