An Empirical Study on Export, Import and Economic Growth in Bangladesh
Tanvir Alam
Bangladesh Institute of Bank Management (BIBM), BBA Major in Finance from Jagannath University, Dhaka, Bangladesh.
Sedratul Hirun Mossamma *
University of Chittagong, Hathazari Upazila, Chittagong, Bangladesh.
Md. Emran Uddin
Department of Business Administration, Metropolitan University, Sylhet 3100, Bangladesh.
*Author to whom correspondence should be addressed.
Abstract
The purpose of this paper is to model Gross Domestic Product (GDP) current price as a function of export percentage change, import percentage change and total investment as a percentage of GDP for Bangladesh. We have used time series data for Bangladesh to show the long run and the short run relationship among the included time series variables. Although, the vector error term is found to be negative, however, because of the non-significant coefficient we could not confirm the long-term relationship among the variables. An ARDL model was performed to estimate the short run relationship among the variables. We find that export, import, and total investment are correlated with GDP growth in Bangladesh. The current value of export percentage change has significant impact on GDP current price. Similar effect is found for import percentage change on GDP current price as well as the lag values of the variable also have significant impact on GDP. Total investment’s effect on GDP growth is significant at marginal level.
Keywords: GDP, import, export, total investment, ARDL approach, VECM model