http://dr.lib.sjp.ac.lk/handle/123456789/7912 Wed, 07 Jan 2026 05:57:11 GMT 2026-01-07T05:57:11Z http://dr.lib.sjp.ac.lk/handle/123456789/7916 Redefining FDI-Growth Relationship under Liberalized Economic Policies Empirical Evidence from Sri Lanka Fernando, P.J.S.; Rajapakshe, D.P. Economic liberalization complimented with export promoting industrial policies attracts FDI than protective policies. However, the contribution of FDI on growth under liberalized economic policies is not sufficiently analyzed. Therefore, we analyze both long run and short run impact of FDI on economic growth in Sri Lanka with special reference to the post-liberalized period of the country. In addition, we compare the impact of domestic capital and FDI on economic growth in the same backdrop. Sri Lanka entered into liberalized economic policies in 1977 by opening its trade account, and in recent years, the policy has extended to the capital and service accounts, as well. In this study, we employ a linear Auto Regressive Distributed Lag (ARDL) model to assess the relationship between economic growth and FDI by employing annual data over the period of 1978 and 2016. The results suggest a positive impact of FDI on both long run and short run growth. However, the contribution of FDI towards growth in Sri Lanka is far below compared to the domestic investments. Thus, we redefine the growth-FDI relationship as follows. Liberal market policies are the necessary condition to enhance FDI-growth relationship. However, it is not the sufficient condition to facilitate economic growth as the positive impact of FDI on growth is moderated by other socio-economic factors. Mon, 01 Jan 2018 00:00:00 GMT http://dr.lib.sjp.ac.lk/handle/123456789/7916 2018-01-01T00:00:00Z http://dr.lib.sjp.ac.lk/handle/123456789/7915 The strength of central bank and its impact on price stability in south Asia Perera, G.A.N.; Gunasekara, W.G.V. Central bank plays a key role in an economy of a country in terms of conducting monetary policy. But the importance of maintaining an adequate level of financial strength for a central bank is subjected to controversy believing that being the monetary authority in the economy, central banks do not require financial strength. But recently, the importance of financial strength even for central banks came to the consideration in the event of financial failures of central banks in larger economies. Hence, the requisite of central bank financial strength in terms of achieving policy objectives particularly the price stability which is the key policy objective of majority of central banks around the world came to discussion. The purpose of this study is to examine the impact of central bank financial strength on price stability in South Asian context. Prevailing limited studies on this field have been focused on the analysis of central bank financial strength and price stability mostly in the context of western countries or as a whole for the world. Investigation on South Asian context would give different insight to the prevailing debate on the topic since it is considered that there is a lower central bank independence within the South Asian region which motivated this study. The study has been conducted for the time period of 1980 to 2015 and an unbalanced panel regression was conducted using central bank financial strength as the main independent variable where the consumer inflation as a proxy to price stability was the dependent variable. Empirical result of this study provides a significant negative relationship between central bank financial strength and inflation suggesting a probable impact from central bank financial strength on price stability for the selected countries within the region. Mon, 01 Jan 2018 00:00:00 GMT http://dr.lib.sjp.ac.lk/handle/123456789/7915 2018-01-01T00:00:00Z http://dr.lib.sjp.ac.lk/handle/123456789/7914 Sri Lanka’s Strength as an International Industrial Location A Theoretical Examination Rajaratne, M.; Tennekoon, P.W. Sri Lanka, in 1978, introduced outward looking export oriented industrialization (OL-EOI) policy with heavy reliance on foreign direct investment (FDI) against the three decade long inward looking import substitution industrialization (IL-ISI) policy that had caused serious impediments to economic development. Although four decades have passed since then, theoretically founded analyses to assess Sri Lanka’s locational soundness are scarce. Thus, this study adopts the Investment Development Path (IDP) framework of John Dunning and Rajnish Narula (1996) for assessing the strength of Sri Lanka as an international industrial location. This study primarily traces the investment development path of Sri Lanka for the past seven decades (1950-2015) covering two policy regimes, namely; relatively closed economic policy regime (1950-1977) and the open economic policy regime (1978-2015). The findings reveal that Sri Lanka has only been able to reach the early second stage of the IDP. This fact can be appropriated to insignificant FDI inflows in consequent to meager supply of location specific created assets (Lca) in contrast to heavy reliance on location specific natural assets (Lna). Mon, 01 Jan 2018 00:00:00 GMT http://dr.lib.sjp.ac.lk/handle/123456789/7914 2018-01-01T00:00:00Z http://dr.lib.sjp.ac.lk/handle/123456789/7913 A Study on Public Debt and Economic Growth in Selected South Asian Countries Kumarasinghe, P. J.; Purankumbura, P. R. P. Public debt is one of the core macroeconomic gages that represent the image of the country in the world. This study analyses the long run association as well as cause and effect of external debt and debt service on economic growth in South Asian countries including variables such as; interest payment, foreign direct investments, gross savings and net export to the model to prevent spuriousness of the outcomes. This research is directed by the neoclassic economic growth theory. The study uses secondary data that were collected from the World Bank (WB) and International Monetary Funds (IMF) by casing period from 1990 to 2015. The stationary of the data set has been tested by applying panel unit root tests. The long run association of the public debt and the economic growth were checked via applying Pedroni Residual Co-integration and cause and effect of the public debt on economic growth in short run check through Granger Causality test. The results show that external debt negatively impacts economic growth in countries of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka are the South Asian countries that are examined in the study. Panel data show that there is a co-integration between external debt and economic growth for South Asian countries. Mon, 01 Jan 2018 00:00:00 GMT http://dr.lib.sjp.ac.lk/handle/123456789/7913 2018-01-01T00:00:00Z