FDI, Trade Intensity and Credit Accessibility Nexus: Evidence from Selected South Asian Countries

Abstract

This study investigates the impact of Foreign Direct Investment (FDI) and trade intensity on credit accessibility in South Asian countries from 1976 to 2022. Addressing a critical research gap, it explores how economic variables influence financial inclusion in regions where access to credit is a significant barrier to growth. Using a panel-data model, the research examines the relationships between FDI, trade openness, and credit access, focusing on national and sectoral variations. The findings reveal a positive correlation between FDI, trade intensity, and credit access in South Asia, though their effects vary across different countries and sectors. This study highlights the importance of adopting context-specific policies to enhance FDI and trade, thereby promoting financial inclusion in South Asia. These insights can assist policymakers in understanding the region's economic dynamics and provide actionable guidance for improving credit access while fostering sustainable economic development.