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The Determinants of Bangladesh's Trade: Evidence from the Generalized Gravity Model

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  • Rahman, Mohammad Mafizur
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    Abstract

    The application of the generalized gravity model in analyzing the Bangladesh's trade reveals that Bangladesh's trade is positively determined by the size of the economies, per capita GNP differential of the countries involved and openness of the trading countries. Bangladesh's exports are positively determined by the exchange rate, partner countries' total import demand and openness of the Bangladesh economy. Bangladesh's imports are determined by inflation rates, per capita income differentials, openness of the countries involved in trade and the border between India and Bangladesh. Multilateral resistance factors and transportation costs affect Bangladesh's trade positively and negatively respectively.

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    File URL: http://hdl.handle.net/2123/7634
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    Bibliographic Info

    Paper provided by University of Sydney, School of Economics in its series Working Papers with number 3.

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    Date of creation: Feb 2005
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    Handle: RePEc:syd:wpaper:2123/7634

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    Postal: Sydney, NSW 2006
    Phone: 61 +2 9351 5055
    Fax: 61 +2 9351 4341
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    Web page: http://sydney.edu.au/arts/economics
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    Keywords: Fixed Effect Model; Bangladesh's Trade; Gravity Model; Panel Data;

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    Cited by:
    1. Cardamone, Paola, 2007. "A survey of the assessments of the effectiveness of Preferential Trade Agreements using gravity models," Working Papers, TRADEAG - Agricultural Trade Agreements 7282, TRADEAG - Agricultural Trade Agreements.

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