Keyword

Trade Liberalization, Cointegration, Vector Error Correction Model, De-Novo hypothesis

Abstract

This paper attempts to investigate whether the government of Bangladesh is promoting industrial exports and investigates the effects of industrial export on growth; with a notion, if de novo hypothesis holds. The paper attempts to check the effects of trade liberalization on growth applying methods of cointegration, and vector error correction model. The study concludes that trade openness is needed to be contained in a controllable level and suggests policymakers to regulate trade openness to gradually diminish the import trend.


Full Text : PDF

References
  • Adelman, I. (1984). Beyond Export-Led Growth. World Development, 12, 937-949.
  • Ahmed, N. (2000). Exprt Response to Trade Liberalisation in Bangladesh: A Cointegration Analysis. Journal of Economics, 32.
  • Athukorala, P. (1998). Export Response to Liberalization : the Sri-Lankan Experience. Hitotsubashi Journal of Economics , 39, 49-65.
  • Balassa, B. (1971). The Structure of Protection in Developing Countries. Baltimore: John Hopkins University.
  • Balassa, B. (1985). Exports, Policy Choices, and Economic Growth in Developing Countries After the 1973 Oil Shock. Journal of Development Economics, 18 (1), 23-35.
  • Bacha, E. (1984). Growth with Limited Supplies of Foreign Exchange: a Reappraisal of Two-gap Model. New York: Academic Press.
  • Bhagwati, J. (1988). Export Promoting Trade Strategies : Issues and Evidence. The World Bank Research Observer, 3, 27-57.
  • Brooks, C. (2008). Introductory Econometrics for Finance. Cambridge: Cambridge University Press.
  • Cheneray, H. (1966). Foreign Assistence and Economic Development. American Economic Review, 56 (4), 679-733.
  • Corden, W. (1974). Trade Policy and Economic Welfare. Oxford: Clarendon Press,.
  • Dornbusch, R. (1974). Tariffs and Nontraded Goods. Journal of International Economics, 28, 221-54.
  • Edwards, S. (1993). Openness, trade liberalization and growth in developing countries. Journal of Economic Literature , 31, 1358-93.
  • Engle, R. a. (1987). Co-integration and Error Correction: Representation, Estimation and Testing. Econometrica, 55, 251-276.
  • Ghirmay, T. G. (2001). Exports, Investment, Efficiency and Economic Growth in LDC: An Empirical Investigation. Applied Economics, 33, 689-700.
  • Granger, C. (1980). Testing for causality. Journal of Economic Dynamic and Control , 2, 329-52.
  • Greenaway, D. M. (2002). Trade Liberalization and Growth in Developing Countries. Journal of Development Economics, 67, 229-244.
  • Grenaway, D. (1994). What Does Liberalization Do for Exports and Growth? Weltwirtschaftliches , 130 (1), 152-174.
  • Grossman, G. (1991). Innovation and Growth in the Global Economy. Cambridge, M.A.: The MIT Press.
  • Hatemi-J.A. (2000). Time-Series Evidence for Balassa's Export-Led Growth Hypothesis. Journal of International Trade and Economic Development, 9 (3), 355-365.
  • Helleiner, G. (1995). Manufacturing for Exports in the Developing World: Problems and Possibilities. London and Newyork: Routledge.
  • Heller, P.(1978). Exports and Growth: An Empirical Re-Investigation. Journal of Development Economics, 5, 191-193.
  • Hossain, M.(2002). Export Response to the Reduction of Anti-Export Bias: Empirics from Bangladesh. Brisbane: University of Queensland.
  • Hossain, M.(2004). Exports and Economic Growth in Bangladesh : Has Manufacturing Exports become a New Engine of Expory-Led Growth? The international trade journal, 40 (3), 303-325.
  • Hossain, M. (2003). Trade Liberalization and Economic Performance: Analytics and Empirics from Bangladesh. Brisbane: School of Economics, University of Queensland.
  • Islam, M. (1998). Export Expansion and Economic Growth Testing for Cointegration and Causality. Applied Economics, 30, 415-425.
  • Johansen, S.(1990). Maximum Likelihood Estinmation and Inference on Cointegration-with Application to the demand of Money. Oxford Bulletin of Economics and Statistics, 52, 169-210.
  • Johnson, H. G. (1950). Factor Endowments, International Trade and Factor Prices. Review of Economic Studies, 1 (48), XIX.
  • Jung, S.(1985). Exports, Growth and Causality in Developing Countries. Journal of Development Economics, 18, 1-12.
  • Karunaratne, M.(2004). Exports and Economic Growth in Bangladesh: Has Manufacturing Exports Become a new Engine of Export-Led Growth. The International Trade Journal , 18 (4), 303-334.
  • Kaldor, N. (1940). A Note on Tariffs and the Terms of Trade, Econometrica, 28, VII.
  • Krugman, P. (1987). Is Trade Policy Passé?’ Economic Perspectives, 1, 131–44.
  • Krugman, P. (1986). New Thinking about Trade Policy. In P. Krugman, Strategic Trade Policy and the New International Economics (1–22). Cambridge, MA: MIT Press.
  • Levine, R.(1992). A sensitivity analysis of cross-country growth regressions. The American Economic Review , 82, 942-63.
  • Lucas, R. (1988). On the Mechanics of Economic Development. Journal of Monetary Economics, 22, 30–42.
  • Maizels, A. (1963). Industrial Growth and World Trade. Cambridge: Cambridge University Press.
  • McKinnon, R. (1964). Foreign Exchange Constraints in Economic Development. Economic Journal, 74, 388-409.
  • Michaely, M. (1976). Export and Economic Growth: An Empirical Investigation. Journal of Development Economics, 4, 49-53.
  • Rahman, S. (1995). Trade and Industrialization in Bangladesh: An Assessment. (G. Helleiner, Ed.) Manufacturing for Exports in the Developing World: Problems and Possibilities .
  • Romer, P. (1989). What determines the rate of growth and technology change? World Bank Working Papers , 279.
  • Romer, P. (1990). Endogenous Technical Change. Journal of Political Economy, 98, 71–102.
  • Sandrum, R. (1994). Exports and Economic Growth. From Classical Economics to Development Economics , 104-20.
  • Salim, R.(1998). Sources of Output growth in Bangladesh Food Processing Industries: A Decomposition Analysis. The development Economics , XXXVII (3), 355-74.
  • Sattar, S. A. (2004). Trade Liberalization, Growth and Poverty Reduction; the case of Bangladesh. Dhaka: The World Bank.
  • Singer, H. (1979). Policy Implications of the Lime Target. Industry and Development, 3, 17-32.
  • Tybout, J. D. (1991). The Effects of Trade Reforms on Scale and Technical Efficiency: New Evidence from Chile. Journal of International Economics, 31, 231–50