Exploring Investment Risks for Chinese Manufacturing Industry in Bangladesh

The explanatory power of institutional and macroeconomic variables for capital stock accumulation and related risks in Bangladesh is investigated. In addition, the risks of foreign investment in Bangladesh have been explored for Chinese manufacturing companies those are going to invest in Bangladesh or developing country. Hypotheses are tested by means of pooled least squares regressions to support the logic of associated risks for investment. The results found that the institutional variables such as political risk and macroeconomic variables are strongly relating the risks for investing in Bangladesh. To invest in developing country like Bangladesh, inflation risk, operational risk, and appreciation of host country's currency, and lower inflation rate stimulate the investment risk for manufacturing company. It is well established that foreign investment company must conform to mitigate strategically those risks in the host country in order to remain competitive.