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Technological Innovation, Infrastructure and Industrial Growth in Bangladesh: Empirical Evidence from ARDL and Granger Causality Approach

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  • Hongzhong Fan
  • Hossain Md Ismail
  • Sultanuzzaman Md Reza

Abstract

In this study, we examined the empirical cointegration, long and short-run dynamics and relationships between technological innovation, infrastructure and industrial growth in Bangladesh over the period of 1974–2016. The ARDL Bounds Test methodology and Granger Causality test in an augmented VECM framework were applied. The ARDL bounds tests and additional cross-checking tests, undoubtedly confirmed long run as well as short-run cointegration between the three variables in Bangladesh. The obtained results expressed that infrastructure has a positive impact on the industrial growth but technological innovation has a negative impact on it in the long run. In the short run, infrastructure and technological innovation both have a positive and significant impact on industrial growth. The VECM Granger causality test reveals the existence of a bi-directional causality running between Industrial growth and infrastructure; and infrastructure and technological innovation. On the other hand, unidirectional causality is running from industrial growth to technological innovation. The findings of the Granger causality test supports the results obtained in the ARDL approach in our study. The results obtained from this empirical analysis have an important policy implication for a developing country like Bangladesh as well as other developing countries.

Suggested Citation

  • Hongzhong Fan & Hossain Md Ismail & Sultanuzzaman Md Reza, 2018. "Technological Innovation, Infrastructure and Industrial Growth in Bangladesh: Empirical Evidence from ARDL and Granger Causality Approach," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(7), pages 964-985.
    • Handle: RePEc:asi:aeafrj:v:8:y:2018:i:7:p:964-985:id:1723
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    Citations

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    Cited by:

    1. Hongzhong Fan & Md Ismail Hossain & Mollah Aminul Islam & Yassin Elshain Yahia, 2019. "The Impact of Trade, Technology and Growth on Environmental Deterioration of China and India," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(1), pages 1-29, January.
    2. Preethu Rahman & Zhihe Zhang & Mohammad Musa, 2023. "Do technological innovation, foreign investment, trade and human capital have a symmetric effect on economic growth? Novel dynamic ARDL simulation study on Bangladesh," Economic Change and Restructuring, Springer, vol. 56(2), pages 1327-1366, April.
    3. Yassin Elshain Yahia & Haiyun Liu & Abdalla Sirag & Sayyed Sadaqat Hussain Shah, 2020. "The Impacts of Intra-Trade on Industrialization: Evidence from COMESA," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(2), pages 75-101, June.
    4. Hridoy Roy & Samiha Raisa Alam & Rayhan Bin-Masud & Tonima Rahman Prantika & Md. Nahid Pervez & Md. Shahinoor Islam & Vincenzo Naddeo, 2022. "A Review on Characteristics, Techniques, and Waste-to-Energy Aspects of Municipal Solid Waste Management: Bangladesh Perspective," Sustainability, MDPI, vol. 14(16), pages 1-25, August.
    5. Md. Hasanur Rahman & Alfarunnahar Ruma & Mohammad Nasir Hossain & Rifat Nahrin & Shapan Chandra Majumder, 2021. "Examine the Empirical Relationship between Energy Consumption and Industrialization in Bangladesh: Granger Causality Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 121-129.
    6. Md Ismail Hossain & Md Istiak Hossain & Mollah Aminul Islam & Md Reza Sultanuzzaman, 2022. "Does Foreign Aid Have an Expected Role in the Economic Growth of Bangladesh? An Analysis in ARDL Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 12(6), pages 113-126, November.
    7. Md. Shafiqul Islam, 2021. "Dynamics of energy use, technological innovation, economic growth, and trade openness in Bangladesh," Economics Bulletin, AccessEcon, vol. 41(3), pages 997-1008.
    8. Alvarado, Rafael & Murshed, Muntasir & Cifuentes-Faura, Javier & Işık, Cem & Razib Hossain, Mohammad & Tillaguango, Brayan, 2023. "Nexuses between rent of natural resources, economic complexity, and technological innovation: The roles of GDP, human capital and civil liberties," Resources Policy, Elsevier, vol. 85(PA).

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