Foreign Direct investment (FDI) is a leading component of the economic development of Bangladesh, assisting capital formation process, recruitment and transferring technologies. In spite of economic reforms since 1990s, FDI inflows continue at modest level, fluctuating and focused on capital-incentives industries such as electricity and communications sectors, restricting development benefits. This research assesses FDI evolution, variables, institutional determinants, and impacts of growth based on existing time series data (1986-2022) from Bangladesh Bank, UNCTAD, World Bank and BIISS. Through descriptive investigation, by using econometric model and Autoregressive Distributed Lag (ARDL) methods, it recognizes macroeconomic, financial and administrative factors shaping FDI and analyzes its contingent contribution to economic development. Findings indicate that structural barriers, regulatory gaps, budgetary inefficiencies, and narrow industrial base regulate FDI while the size of the market, institutional performances and sustainable economic conditions raise inflows. FDI promotes growth facilitated by capacity of innovation and effective governance systems. Policy orientation should highlight on structural reform, economic diversification, online investment support system, tax modernization and technologically advanced sustainable FDI to enhance long –run economic advantages.
Keywords: Foreign Direct Investment, Bangladesh, Economic Growth, Institutional Quality, ARDL, Policy Reform
Citation: Sani, J. (2026). Foreign Direct Investment in Bangladesh: Trends, Patterns and Recent Developments. J Business & Eco Insights.,2(2):1-8.