Ready-Made Garments (RMG) Export Earnings and Economic Development of Bangladesh: Empirical Analysis Using Vector Error Correction Model

• 영문명: Ready-Made Garments (RMG) Export Earnings and Economic Development of Bangladesh: Empirical Analysis Using Vector Error Correction Model
• 발행기관: 한국유통과학회
• 저자명: Abul Jannat JIBAN Gautam Kumar BISWAS Shaohua YANG
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 9 No.10, 29~38쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2022.12.31

영문 초록

Ready-made Garments (RMG) export earnings, which are almost 80% of the total exports of Bangladesh, have been recognized as one of the main catalysts for the recent development of the country. Therefore, the need to determine whether the RMG export had served as a mechanism for increasing the GDP growth as well as the economic development of the country is topical and pressing. We have applied the Johansen Co-integration test and Vector Error Correction Model (VECM) to reveal the linkage of RMG export earnings and other variables with the GDP growth rate in Bangladesh. Using data from 1990 to 2020 for Bangladesh, we have found long-run as well as shortrun associations among RMG Export earnings, Foreign Direct Investment (FDI), and GDP growth. A co-integration among the variables is validated through the Johansen Co-integration test. Moreover, a causal correlation running from RMG export earnings to GDP was revealed by the Granger causality test in the long run. Finally, we estimated impulse response functions to observe the variations of model variables in response to a shock. Our result supports the proposition that RMG export earnings are one of the main growth engines in Bangladesh and this sector leads growth in other sectors also in the long term.

목차

1. Introduction

2. Literature Review

3. Data and Model Specification

4. Empirical Results

5. Conclusion

References

키워드

Ready-made Garments Exports GDP FDI Vector Error Correction Model