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Urbanization and Income inBangladesh: An Empirical Analysis

Author

Listed:
  • Anowara Khanam

    (Assistant Professor, Department of Economics, Bangladesh University of Business and Technology (BUBT), Mirpur 2, Dhaka-1216.)

  • Md. Shariful Islam

    (Assistant Professor, Department of Economics, Bangladesh University of Professionals(BUP), Mirpur Cantonment, Dhaka-1216.)

Abstract

This paper investigates the causal relationship between urbanization and per capita income of Bangladesh for the sample period of 1972-2018. Both the Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests are applied to find the existence of unit root in each of the time series data collected from World Development Indicators (WDI). To observe the long-run relationship between urbanization and per capita income this study relies on Johansen-Juselius cointegration technique. Empirical results of this paper confirm the presence of long-run relationship between the variables. The Granger causality test shows that causality between urbanization and per capita income is bi-directional. Impulse Response Function and Variance Decomposition analyses are performed for robustness check.

Suggested Citation

  • Anowara Khanam & Md. Shariful Islam, 2019. "Urbanization and Income inBangladesh: An Empirical Analysis," Journal of Business, LAR Center Press, vol. 4(2), pages 19-27, February.
    • Handle: RePEc:lrc:larjob:v:4:y:2019:i:2:p:19-27
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    References listed on IDEAS

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    More about this item

    Keywords

    Urbanization; Per Capita Income; Johansen-Juselius cointegration technique; Long-run Relationship; Granger Causality Test.;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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