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Role of Agriculture and Manufacturing Sectors in the Economic Growth of Bangladesh and India: An ARDL Approach

Author

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  • Md. Sayemul Islam
  • Md. Asraf Mahmud Hasif
  • Nishat Sultana Ema
  • Hasneen Jahan

Abstract

Agriculture and manufacturing are two vital components of the economy. This article empirically explored the long-run and short-run impact of these two sectors on the economic development of Bangladesh and India by employing the ARDL model over the period from 1975 to 2019. The outcome of the F-bounds test confirmed the existence of a long-run relationship among the variables examined for both Bangladesh and India. The study then analyzed the short-run impact of the agriculture and the manufacturing on economic growth for Bangladesh and India. The short-run coefficients revealed that there exists a positive impact of the agriculture and the manufacturing sectors on economic growth for both Bangladesh and India. Findings further showed that both agriculture and manufacturing led to the long-run economic development of Bangladesh. Whereas, in India, only the manufacturing sector proved to have a positive long-run impact on economic advancement as, in the long run, India’s agriculture demonstrated an insignificant and weak influence on economic development. Hence, it is noteworthy that the manufacturing sector solely served as the engine of economic growth of India. On the other side, both agriculture and manufacturing led to Bangladesh’s growth. The study concluded that Bangladesh should provide equal importance to both the agricultural and manufacturing sectors to achieve long-run economic development. This paper also recommended that the Indian Government should promote long-term agriculture development projects. Above all, to attain steady economic growth, agriculture, along with the manufacturing sector should be developed concurrently.

Suggested Citation

  • Md. Sayemul Islam & Md. Asraf Mahmud Hasif & Nishat Sultana Ema & Hasneen Jahan, 2020. "Role of Agriculture and Manufacturing Sectors in the Economic Growth of Bangladesh and India: An ARDL Approach," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 23(78), pages 82-92, December,.
    • Handle: RePEc:rej:journl:v:23:y:2020:i:78:p:82-92
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    References listed on IDEAS

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    2. World Bank, 2015. "World Development Indicators 2015," World Bank Publications - Books, The World Bank Group, number 21634, December.
    3. Subramaniam, Vijay & Reed, Michael R., 2009. "Agricultural Inter-Sectoral Linkages and Its Contribution to Economic Growth in the Transition Countries," 2009 Conference, August 16-22, 2009, Beijing, China 51586, International Association of Agricultural Economists.
    4. Houssem Eddine Chebbi, 2010. "Agriculture and economic growth in Tunisia," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 2(1), pages 63-78, February.
    5. Zeira, Joseph & Zoabi, Hosny, 2015. "Economic growth and sector dynamics," European Economic Review, Elsevier, vol. 79(C), pages 1-15.
    6. Okunola Akinbode Michael, 2017. "Long and Short Run Dynamics of Agricultural and Petroleum Sectors in the Economic Growth of Nigeria," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 20(64), pages 13-27, June.
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    Cited by:

    1. Shahidul Islam & Subhadip Ghosh & Mohua Podder, 2022. "Fifty years of agricultural development in Bangladesh: a comparison with India and Pakistan," SN Business & Economics, Springer, vol. 2(7), pages 1-41, July.

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    More about this item

    Keywords

    Agriculture; manufacturing; economic growth; ARDL model. F-bounds test;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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