Do Exports & FDI Go Hand in Hand?
Foreign direct investment can act as a tool in raising the exports of a country. In accordance to this view, this
paper investigates the relationship between Exports (% of GDP) and Foreign direct investment for SAARC member states
for period 2010-2013. As a remedial measure for diseases of auto-correlation and heteroskedasticity, random effects with
generalized least square are used for estimation. The effect of foreign direct investment on exports is found to be significant
and positive. Recommendations are made to policy attention at the end of this paper.