Extended Exogenous Growth Model: Application and Investigation the Long-Term Growth Determinants of Bangladesh

This study explored various exogenous growth theories and investigated the determinants of the long-term economic growth of Bangladesh. The study estimated the extended exogenous growth model to find the factors of long-term economic growth by exploring the macroeconomic choice variables. The study analyzed the determinants of long-term economic growth by using the annual time-series data from the World Development Indicators (WDI) database from 1985 to 2018. The Autoregressive Distributed Lag (ARDL) and Bounds Test were applied to find the long-term cointegration relationship between the variables, and the Error Correction Model (ECM) identified a stable long-term relationship. The results showed a long-term positive and negative cointegration relationship between economic growth and its estimated determinants. The results found that economic growth has a positive relationship with government consumption expenditure, fertility rate, inflation rate, and agricultural sector growth, and a negative association with population growth. The overall findings of the study contradict the empirical results of the extended exogenous growth model. The study suggests that the Bangladesh government should promote the research and development sector and give importance to technological improvement, stock of human capital growth, capital stock expansion, and governmental actions.