Export-Led Growth Hypothesis in Developing Countries: Econometric Evidence from Bangladesh

Year 2019, Volume: 12 Issue: 4, 454 - 465, 18.10.2019

Harun Bal , Abdulla Hil Mamun , Shahanara Basher Mohammad Rahim Uddın , Masrurul Mowla

https://doi.org/10.25287/ohuiibf.507759

Cited By: 2

Abstract

The meticulous growth of both export and output of Bangladesh following the inception of trade liberalisation and export promotion in the late 1970s through 2010s gravely underscore the export-led growth (ELG) hypothesis for the economy. The present study examines whether the economic growth of Bangladesh is lead by exports employing the ARDL Bounds testing approach with particular attention to its long-run dynamics for the period from 1974 to 2015. Despite having a positive impact of trade and export on economic growth irrespective to the short run as well as in the long term, the absence of unidirectional positive causal relation from exports to economic growth, in the long run, rejects the validity of ELG hypothesis for Bangladesh. Import and gross capital formation are found to have an impact on economic growth compatible with theoretical expectation.

Keywords

Export-Led

Export-Led Growth Hypothesis in Developing Countries: Econometric Evidence from Bangladesh

Abstract

The
meticulous growth of both export and output of Bangladesh following the
inception of trade liberalisation and export promotion in the late 1970s
through 2010s gravely underscore the export-led growth (ELG) hypothesis for the
economy. The present study examines whether the economic growth of Bangladesh
is lead by exports employing the ARDL Bounds testing approach with particular
attention to its long-run dynamics for the period from 1974 to 2015. Despite
having a positive impact of trade and export on economic growth irrespective to
the short run as well as in the long term, the
absence of unidirectional positive causal relation from exports to economic
growth, in the long run,
rejects the validity of ELG hypothesis for Bangladesh. Import and gross capital
formation are found to have an impact on economic growth compatible with
theoretical expectation.

Keywords

Export-led Growth, Bounds Test

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