Is Export-led Economic Growth Significant in LDCs?: Evidence from Bangladesh

Authors

  • Md Fokhrul Islam University of Dhaka
  • Fuad Hasan University of Dhaka
  • S M Shariful Islam University of Dhaka
  • Sarabul Islam Sajbir University of Dhaka

Keywords:

Bangladesh, LDC, GDP, Export, Economic Growth

Abstract

The purpose of this piece of work is to find out whether there persists any long-run relationship between the exports and economic growth in Bangladesh as a member of the LDCs. In this connection, the export-led growth hypothesis has been tested for the Bangladeshi economy for the last three decades of timeframe. Time-series econometric approach, the Johansen Cointegration test is followed in the study to find out the long-run relationship among the variable. The Granger casualty test was done to find the direction of the casualty.  The Time-series data from the period 1991 to 2020 are analyzed through several econometric test procedures. The gross domestic product is regarded as the dependent variable, whereas the Exports of goods & services and the Gross Capital Formation are considered independent variables. The estimated model is examined for a structural break using the Chow Test. The Breusch–Godfrey and Durbin-Watson tests are performed to determine whether or not autocorrelation exists. It is recognized that export-led economic growth has no long-term significance for Bangladesh's economy. The findings are consistent with those of Li et al. (2010) on low-income nations. The R-squared value of the estimated model is 83%, indicating that the model fits the data quite well. As Bangladesh is likely to become a middle-income country very soon, the study is highly pertinent to the country's current development dynamics.

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Published

2022-12-17

How to Cite

Islam, M. F., Hasan, F. ., Islam, S. M. S., & Sarabul Islam Sajbir. (2022). Is Export-led Economic Growth Significant in LDCs?: Evidence from Bangladesh. AIUB Journal of Business and Economics, 19(2), 93–108. Retrieved from http://116.206.57.42/index.php/ajbe/article/view/122