Impacts of Trade Liberalization on Export Performance in Bangladesh: An Empirical Investigation

Abstract

In the backdrop of persistent trade deficit, Bangladesh has been extensively liberalizing its trade regime since 1992 in order to achieve higher export performance and GDP growth. However, despite the liberalization, imports are still growing faster than exports, increasing trade deficit. The article empirically examines the impacts of trade liberalization on export performance in Bangladesh, using the ARDL ‘Bounds Test’ approach with annual time series data. Empirical results indicate that trade liberalization is having statistically significant but low impact on aggregate export. Neither capital stock as a technology transfers nor liberalization through reduction and withdrawal of export duties shows a significant impact on export performance. Exports are mostly stimulated by GDP growth. The interaction of liberalization with GDP increases exports a little, hence improving the trade balance. However, the liberalization enhances imports compared to exports hence the trade deficit. Therefore, a combined and consistent policy to promote GDP growth, technology transfers and domestic price stability, including education, infrastructures and backward linkage industries is essential in order to achieve higher export performance in Bangladesh.

Effects of Trade Openness, Exchange Rate, and Oil Price on the Exports in Syria

“…This suggests that trade openness has an important role in supporting exports through opening up new markets for local products and reducing restrictions that affect exports, such as export taxes, and export"s complex procedures. Our result agree with Wu and Zeng (2008), Anwar et al (2010), Hoque and Yusop (2012), and Allaro (2012). The coefficient of lnEXR indicates that for every one percent increases in exchange rate, exports will decrease by 1.03 percent.…”

Effect of Economic Integration on Agricultural Export Performance in Selected West African Countries

“…A number of studies have investigated the effects of trade liberalisation on export growth in developing countries with inconclusive results. Some studies have identified positive effects of trade liberalisation on export performance (Bleaney and Wakelin 2002;Coyle et al 1998;Hoque and Yusop 2012;Krueger 1997), while others confirmed an insignificant or even negative relationship (Greenaway et al 1999;Jenkins 1997).…”

“…Similarly, Hoque and Yusop (2012) estimated an autoregressive distributed lag model (ARDL) bond testing approach for Bangladesh between 1972 and 2005. Their study assessed the impacts of trade liberalisation on export performance and reported that exports are mostly stimulated by GDP growth in Bangladesh.…”

Trade Liberalization, Exports and Imports in Syria

“…International trade has an important role in promoting economic growth, and this has resulted in a large number of studies that have investigated the effects of trade openness as an indicator of or proxy for trade liberalization on trade flows. Most of these studies including Santos-Paulino and Thirlwall 2004, Wu and Zeng (2008), Hoque and Yusop (2012) and Allaro (2012) concluded that trade openness has a positive effect on both exports and imports. Besides, Thomas, Nash and Edwards (1991), Weiss (1992), Helleiner (1994), Jenkins (1996), Joshi and Little (1996), Bleaney (1999), Ahmed (2000), Edwards and Alves (2006) and Anwar, Shaukat and Hussain (2010) found that trade openness has a positive impact on exports.…”