Abstract
Investment plays a vital part in economic progress of the countries. The current study tried to examine the influence of the investment on economic development of South Asian Association of Regional Cooperation (SAARC) countries by used the panel data for the dated 2000-2014. This study applied Hausman test to check the fixed effect model is appropriate or random effect model is appropriate. The empirical results explained that the random effect model is suitable in this study. Random effect model has been examined the influence of investment, government expenditure and inflation on economic evolution of SAARC countries. The study also explained that the investment, government expenditure are positive impact on economic progress. The outcome of inflation is negligible on economic evolution.