Effects of Trade Openness and Industrial Value Added on Economic Growth in Bangladesh
Shahjahan Ali,
Khandaker Jahangir Alam,
Md. Shafiul Islam
Issue:
Volume 2, Issue 2, March 2016
Pages:
6-11
Received:
4 August 2016
Accepted:
1 September 2016
Published:
17 October 2016
DOI:
10.11648/j.ijsdr.20160203.11
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Abstract: This study is an attempt to study the empirical relationship among trade openness, industrial value added and economic growth in Bangladesh. Annual time series data set (1981 to 2015) are utilized to detect the connections among the indicators of interest. Unit root test was applied to determine the time series properties of the variables: Gross Domestic Product (GDP), export, import and industrial value added while Ordinary Least Squares (OLS) technique of estimation and Granger causality test were employed to find out direction of causality. The results from the econometric model indicate that imports have a negative relationship while exports positively influence economic growth. The industrial value added also has positive influence on economic growth. It is recommended that Bangladesh should engage in export promotion and import substitution with a view to strengthening the economy and consequently enhance the living standards of its population.
Abstract: This study is an attempt to study the empirical relationship among trade openness, industrial value added and economic growth in Bangladesh. Annual time series data set (1981 to 2015) are utilized to detect the connections among the indicators of interest. Unit root test was applied to determine the time series properties of the variables: Gross Do...
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