IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2011-04-3.html
   My bibliography  Save this article

The Export Supply Model of Bangladesh: An Application of Cointegration and Vector Error Correction Approaches

Author

Listed:
  • MD. Moniruzzaman

    (Deputy Secretary to the Government of Bangladesh, Bangladesh)

  • Mahmudul Mannan Toy

    (Department of Business Administration Shanto-Mariam University of Creative Technology Dhaka, Bangladesh.)

  • A. B. M. Rashedul Hassan

    (Treasurer, Atish-Dipankar University of Science and Technology Dhaka, Bangladesh.)

Abstract

The broad objective of this study is to empirically estimate the export supply model of Bangladesh. The techniques of cointegration, Engle-Granger causality and Vector Error Correction are applied to estimate the export supply model. The econometric analysis is done by using the time series data of the variables of interest which is collected from various secondary sources. The study has empirically tested the hypothesis, long run relationship and casualty between variables of the model. The cointegration analysis shows that all the variables of the study are co-integrated at their first differences meaning that there exists long run relationship among the variables. The VECM estimation shows the dynamics of variables in the export supply function and the short run and long run elasticities of export supply with respect to each independent variable. The error correction term is found negative which indicates that any short run disequilibrium will be turned into equilibrium in the long run.

Suggested Citation

  • MD. Moniruzzaman & Mahmudul Mannan Toy & A. B. M. Rashedul Hassan, 2011. "The Export Supply Model of Bangladesh: An Application of Cointegration and Vector Error Correction Approaches," International Journal of Economics and Financial Issues, Econjournals, vol. 1(4), pages 163-171.
    • Handle: RePEc:eco:journ1:2011-04-3
    as

    Download full text from publisher

    File URL: http://econjournals.com/index.php/ijefi/article/download/31/pdf
    Download Restriction: no
    File URL: http://econjournals.com/index.php/ijefi/article/view/31/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Amelia U. Santos‐Paulino, 2004. "Trade Liberalization and the Balance of Payments in Selected Developing Countries," Manchester School, University of Manchester, vol. 72(1), pages 100-118, January.
    2. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    3. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    4. Amelia Santos-Paulino & A. P. Thirlwall, 2004. "The impact of trade liberalisation on exports, imports and the balance of payments of developing countries," Economic Journal, Royal Economic Society, vol. 114(493), pages 50-72, February.
    5. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    6. Mohammad A. Hossain & Mohammad Alauddin, 2005. "Trade liberalization in Bangladesh: the process and its impact on macro variables particularly export expansion," Journal of Developing Areas, Tennessee State University, College of Business, vol. 39(1), pages 127-150, September.
    7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mabeta, Joshua, 2015. "Determinants of Non-Traditional Agricultural Exports Growth in Zambia: A Case of Cotton and Tobacco," Research Theses 243450, Collaborative Masters Program in Agricultural and Applied Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Titus O. Awokuse, 2003. "Is the export-led growth hypothesis valid for Canada?," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 126-136, February.
    2. Onafowora, Olugbenga A. & Owoye, Oluwole, 1998. "Can Trade Liberalization Stimulate Economic Growth in Africa?," World Development, Elsevier, vol. 26(3), pages 497-506, March.
    3. Fakhri J. Hasanov & Muhammad Javid & Frederick L. Joutz, 2022. "Saudi Non-Oil Exports before and after COVID-19: Historical Impacts of Determinants and Scenario Analysis," Sustainability, MDPI, vol. 14(4), pages 1-38, February.
    4. Bakari, Sayef, 2017. "Why is South Africa Still a Developing Country?," MPRA Paper 80763, University Library of Munich, Germany.
    5. Abhijit Sharma & Theodore Panagiotidis, 2003. "An Analysis of Exports and Growth in India: Some Empirical Evidence (1971-2001)," Working Papers 2003004, The University of Sheffield, Department of Economics, revised Nov 2003.
    6. Nasim Shah Shirazi & Turkhan Ali Abdul Manap, 2005. "Export-Led Growth Hypothesis: Further Econometric Evidence From South Asia," The Developing Economies, Institute of Developing Economies, vol. 43(4), pages 472-488, December.
    7. Ambreen FATEMAH & Abdul QAYYUM, 2018. "Modeling the impact of exports on the economic growth of Pakistan," Turkish Economic Review, KSP Journals, vol. 5(1), pages 56-64, March.
    8. Sahoo, Auro Kumar & Sahoo, Dukhabandhu & Sahu, Naresh Chandra, 2014. "Mining export, industrial production and economic growth: A cointegration and causality analysis for India," Resources Policy, Elsevier, vol. 42(C), pages 27-34.
    9. Yifru, Tigist, 2015. "Impact of Agricultural Exports on Economic Growth in Ethiopia: The Case of Coffee, Oilseed and Pulses," Research Theses 243473, Collaborative Masters Program in Agricultural and Applied Economics.
    10. Muhammad Arshad Khan & Atif Ali Jaffri & Faisal Abbas & Azad Haider, 2017. "Does Trade Liberalization Improve Trade Balance in Pakistan?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 18(2), pages 158-183, September.
    11. Asmawi Hashim & Norimah Rambeli & Norasibah Abdul Jalil & Normala Zulkifli & Emilda Hashim & Noor Al-Huda Abdul Karim, 2019. "Does Export Led Growth Hypothesis Hold Under World Crisis Recovery Regime in Malaysia?," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(5), pages 9-19, December.
    12. Yifru, Tigist, 2015. "Impact Of Agricultural Exports On Economic Growth In Ethiopia: The Case Of Coffee, Oilseed And Pulses," Research Theses 265676, Collaborative Masters Program in Agricultural and Applied Economics.
    13. Aurora A.C. Teixeira & Natércia Fortuna, 2006. "Human capital, trade and long-run productivity. Testing the technological absorption hypothesis for the Portuguese economy, 1960-2001," FEP Working Papers 226, Universidade do Porto, Faculdade de Economia do Porto.
    14. Adeel Saleem & Maqbool H. Sial & Ahmed Raza Cheema, 2023. "Does an asymmetric nexus exist between exports and economic growth in Pakistan? Recent evidence from a nonlinear ARDL approach," Economic Change and Restructuring, Springer, vol. 56(1), pages 297-326, February.
    15. Greenwell Collins Matchaya & Pius Chilonda & Sibusiso Nhelengethwa, 2013. "International Trade and Income in Malawi: A Co-integration and Causality Approach," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 6(2), pages 125-147, September.
    16. Byoungki Kim & Phouphet Kyophilavong & Kenji Nozaki & Teerawat Charoenrat, 2022. "Does the Export-led Growth Hypothesis Hold for Myanmar?," Global Business Review, International Management Institute, vol. 23(1), pages 48-60, February.
    17. Vassilis Monastiriotis & Cigdem Borke Tunali, 2020. "The Sustainability of External Imbalances in the European Periphery," Open Economies Review, Springer, vol. 31(2), pages 273-294, April.
    18. Zamani, Mehrzad, 2007. "Energy consumption and economic activities in Iran," Energy Economics, Elsevier, vol. 29(6), pages 1135-1140, November.
    19. Muhammad Shafiullah & Ravinthirakumaran Navaratnam, 2016. "Do Bangladesh and Sri Lanka Enjoy Export-Led Growth? A Comparison of Two Small South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 114-132, March.
    20. Xu, Haifeng & Hamori, Shigeyuki, 2012. "Dynamic linkages of stock prices between the BRICs and the United States: Effects of the 2008–09 financial crisis," Journal of Asian Economics, Elsevier, vol. 23(4), pages 344-352.

    More about this item

    Keywords

    Engine of Growth; Cointegration; Granger Causality; VECM; VAR; Impulse Response.;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2011-04-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.