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The Effect of the Pandemic on the RMG Export of Bangladesh: Exploring the Economic Channels of Transmission

Author

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  • Banna Banik

    (Bangladesh Bank, Bangladesh)

Abstract

This study aims to empirically analyse the potential long-run and short-run effects of the COVID-19 pandemic on the ready-made garments (RMG) export growth of Bangladesh. We distinguish two transmission channels: credit growth and the degree of openness to trade, through which the pandemic could affect RMG exports, using monthly time series data from June 2009 to August 2020. We employ a bounds test approach to the autoregressive distributed lag (ARDL) cointegration method. The bounds test specifies long-run and short-run relationships between credit growth, openness, and RMG exports. We found that the pandemic has a significant negative effect in the short run but a positive impact on exports through these transmission channels in the long run. Thus, more credit support for this sector and opening up the economy to international trade are essential for the total recovery of RMG exports.

Suggested Citation

  • Banna Banik, 2023. "The Effect of the Pandemic on the RMG Export of Bangladesh: Exploring the Economic Channels of Transmission," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 21(3 (Fall)), pages 201-221.
  • Handle: RePEc:mgt:youmgt:v:21:y:2023:i:3:p:201-221
    DOI: 10.26493/1854-6935.21.201-221
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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L69 - Industrial Organization - - Industry Studies: Manufacturing - - - Other

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