B.U. JOURNAL OF BUSINESS STUDIES OF B.U. JOURNAL BARISHAL UNIVERSITY JOURNAL (PART-3) A JOURNAL OF BUSINESS STUDIES University of Barishal, Barishal 8200, Bangladesh Volume-5, Issue –II, December 2018 ISSN 2411- 247X Volume - 5, Issue - II, December - 2018 - 5, Issue II, December Volume FACULTY OF BUSINESS STUDIES, UNIVERSITY OF BARISHAL Barishal University Journal (Part-3), Vol. 5 Issue 2 (December 2018) ISSN 2411-247X BARISHAL UNIVERSITY JOURNAL (PART-3) ISSN2411-247X Volume 5 Issue 2 December 2018 EDITORIAL BOARD Editor-in-Chief Dean Faculty of Business Studies, University of Barishal, Barishal 8200, Bangladesh Associate Editor Sujan Chandra Paul Assistant Professor and Chairman, Department of Accounting & Information Systems University of Barishal, Barishal 8200, Bangladesh Editorial Board Prof. Shibli Rubayat Ul Islam Chairman Dean Department of Finance and Banking Faculty of Business Studies University of Barishal University of Dhaka Barishal 8200, Bangladesh Dhaka 1000, Bangladesh Chairman Dr. Mojib Uddin Ahamed Department of Marketing Professor University of Barishal Department of Tourism and Hospitality Barishal 8200, Bangladesh Management University of Dhaka Dhaka 1000, Bangladesh Chairman Department of Management Studies University of Barishal Barishal 8200, Bangladesh Prof. M. Shah Newaj Ali Professor Chairman Department of Management Studies Department of Accounting and Information Systems University of Rajshahi University of Barishal Rajshahi, Bangladesh Barishal 8200, Bangladesh Dr. Mubina Khondkar Professor Department of Marketing University of Dhaka Dhaka 1000, Bangladesh Published by: Editor-in-Chief, Barishal University Journal Part (III), on Behalf of the Editorial Board. Printed by: A.com Traders.119/20 (1st Floor), Gausul Azam Super Market, Nilkhat, Dhaka - 1205. i Barishal University Journal (Part-3), Vol. 5 Issue 2 (December 2018) ISSN 2411-247X Massage from the Editor-in-Chief The Barishal University Journal of Business Studies (ISSN 2411-247X) is an academic journal that examines the synthesis of business, society, and economics. BUJBS is published semiannually and is available in electronic versions. Our expedited review process allows for a thorough analysis by expert peer-reviewers within a time line that is much more favorable than many other academic publications. The Barishal University Journal of Business Studies welcomes submissions that explore the social, educational and business aspects of human behavior as related to Bangladesh. Because The Barisal University Journal of Business Studies takes a broad and inclusive view of the study of both business and economics, this publication outlet is suitable for a wide variety of interests. Appropriate submissions could include general survey research, attitudinal measures, research in business academia practitioners are participants, investigations into broad business and economic issues, or any number of empirical approaches that fit within the general umbrella provided by the journal. Authors are invited to submit their work at any time throughout the year and should carefully review the submission criteria and requirements. The Barishal University Journal of Business Studies maintains rigorous peer-reviewed standards. If you have a submission that you believe meets our criteria, we encourage you to consider BUJBS as an outlet for your academic research. If you have questions regarding this journal or submission requirements, please feel free to review the author information sections of the web site or contact the editor directly at [email protected] With thanks, Editor in chief Barishal University Journal of Business Studies ii Barishal University Journal (Part-3), Vol. 5 Issue 2 (December 2018) ISSN 2411-247X CONTENTS Page Shahadat Hussain The Impact of Inflation and Banking Sector 1-16 Development on Foreign Direct Investment in Bangladesh Md. Saif Uddin Rashed Forecasting of selected stock price index of Chittagong 17-36 Stock Exchange (CSE): An Application of SARIMA Model Iftekhar Uddin Ahmed A thematic analysis of Chairman’s Statement of the 37-50 Amirus Salat Commercial Banks of Bangladesh Sujan Chandra Paul Impact of Democracy Scores on GDP Growth Rate: A 51-66 Md. Arif Hosen Cross Country Study Saima Akhter The Effect of Country of Origin on Foreign Brand names 67-90 in Local Market: A Case Study on Apparel Product Abdullah Al Masud Human resource management practices (HRMP) and its 91-116 Suniti Debi Mondal impact on employee’s performance of the textile industry: An exploratory study in the readymade garments sector in the southern region of Bangladesh. Bankim Chandra Sarker Factors Affecting Work-family Conflict among the 117-134 Farha Sultana Female Faculty Members: Empirical Evidence from Private Universities in Bangladesh. Md. Abir Hossain The Impact of Reward Systems on Employee’s 135-154 Md. Ferozul Islam Noyon Productivity in Small and Medium Enterprises of Barisal City of Bangladesh Md. Mahiuddin Sabbir Effects of Socio-cultural and Marketing Factors on 155-172 Samir Das Consumer Purchase Intention towards Skin Care Products: Evidence from Bangladesh Papi Halder Evaluating the Financial Health of Selected Commercial 173-190 Md. Nurul Kabir Biplab Banks in Bangladesh. Md. Mahtab Uddin iii Barishal University Journal (Part-3), Vol. 5 Issue 2 (December 2018) ISSN 2411-247X Md. Imran Hossain Measuring Influence of Green Promotion on Green 191-222 Md. Shahinur Rahman Purchase Behavior of Consumers: A Study on Bangladesh. Md. Alamgir Mollah Perceived Differences of Health Service Quality between 223-246 Md. Mamin Ullah Patients and Health Service Providers: Empirical Md. Sohel Chowdhury Evidence from Bangladesh iv The Impact of Inflation and Banking Sector Development on Foreign Direct Investment in Bangladesh Shahadat Hussain* ABSTRACT This study sets out to examine the impact of inflation and banking sector development on foreign direct investment in Bangladesh using data for the period of 1987 to 2016 employing Johansen co-integration test, VECM and Granger causality test. The empirical analysis shows that there is one co-integrating vector which indicates the existence of long run relationship between inflation and domestic credit to the private sector by banks to FDI inflows. It has also been found that banking sector development exerts significant positive but inflation exerts insignificant negative influence on FDI inflows. Finally, a unidirectional causality was discovered between banking sector development to FDI inflows. The study suggests that concerned authority should take prompt steps to develop banking sector and manage inflation to accelerate the FDI inflows in Bangladesh. Keywords: FDI, Inflation, Banking sector, Causal relationship. 1. Introduction: The development of banking sector is a precondition for the foreign direct investment (FDI) to speed up the economic growth of a country (Alfaro and others 2004, 2010, Hermes and Lensink 2003). The smooth and well-functioning financial sector or market liberalization can help to urge economic growth (Bekaert and others 2005, Levine and others 2000, Levine and Zervos 1998).There is a positive relationship between FDI and inflation in Pakistan (Salemand others *Assistant Professor, Department of Finance and Banking, University of Barishal Barishal University Journal Part III, Volume 5 Issue 2 (December 2018) 2012). The main focusing point of this paper is to analyze the impact of inflation and banking sector development on foreign direct investment in Bangladesh. Actually, the financial services are heavily dependent on the development of the financial sectors especially on banking sector. As a developing country, the financial sectors in Bangladesh are on average shallow and poorly developed. On the other hand, the capability of absorbing the internal and external macroeconomic shocks is very weak. Additionally, the country is heavily dependent on FDI inflows for economic prosperity. In the same way inflation is a common scenario for the developing countries. So, it is imperative to identify the linkage between inflation and banking sector development to FDI inflows in Bangladesh. The findings in this study could have important policy implications for concerned authorities of Bangladesh. Identification of the relationship could help to improve the quality of local banking sector to make them more efficient and attractive for any MNCs to invest in respective markets. The rest of this paper is organized as follows. In addition to the introduction section 2 presented objectives of the study. Section 3 presented literature review while section 4 discussed description of the data and methodology. Empirical results of the study are explained in section 5. Finally, concluding remarks are drawn in section 6. 2. Objectives of the Study: The objective of this study is to analyze the impact of inflation and banking sector development on foreign direct investment (FDI) in Bangladesh. 2 The Impact of Inflation and Banking Sector Development on Foreign Direct Investment in Bangladesh 3. Literature Review: Aqeel and others (2004) verified that how different variables are reflecting trade, fiscal and financial sector liberalization to attract FDI in Pakistan using co-integration and error-correction techniques. The study included the variables i.e., tariff rate, exchange rate, tax rate, credit to private sector and index of general share price to explain the FDI. In the study, banking sector was represented by the size of credit to the private sector. All variables