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Foreign Policy Uncertainty and Export Dynamics: Insights from a Developing Economy

Author

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  • S. M. Woahid Murad

    (Curtin University, School of Accounting, Economics and Finance
    Noakhali Science and Technology University, Department of Economics)

  • Aklima Akter

    (Noakhali Science and Technology University, Department of Economics)

  • Arifur Rahman

    (Lanzhou University, School of Economics)

  • Mohammad Iqbal Hossain

    (Noakhali Science and Technology University, Department of Economics
    University of Calgary, Department of Economics)

Abstract

This study investigates the impact of trading partners’ economic policy uncertainty (EPU) on Bangladesh’s exports. Using monthly bilateral data for 17 major partners from 2001 to 2020 and a newspaper-based EPU index, we estimate linear and nonlinear panel ARDL models with common correlated effects. Results indicate a positive long-run effect of foreign EPU on exports, reflecting Bangladesh’s competitiveness in low-cost consumer goods. The relationship is asymmetric in the long run but insignificant in the short run. Causality tests confirm bidirectional linkages between exports and EPU. Findings underscore the importance of monitoring global policy uncertainty to sustain export resilience and growth.

Suggested Citation

  • S. M. Woahid Murad & Aklima Akter & Arifur Rahman & Mohammad Iqbal Hossain, 2025. "Foreign Policy Uncertainty and Export Dynamics: Insights from a Developing Economy," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 21(1), pages 49-69, November.
    • Handle: RePEc:spr:jbuscr:v:21:y:2025:i:1:d:10.1007_s41549-025-00110-5
    DOI: 10.1007/s41549-025-00110-5
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    Keywords

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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