On Export-Led Growth: Is Manufacturing Exports a New Engine of Growth for Bangladesh?

Hossain, Mohammad A and Karunaratne, Neil Dias (2001) On Export-Led Growth: Is Manufacturing Exports a New Engine of Growth for Bangladesh?. Discussion Paper No 297, School of Economics, The University of Queensland.

Attached Files (Some files may be inaccessible until you login with your UQ eSpace credentials)
Name Description MIMEType Size Downloads
DP297Dec01.pdf DP297Dec01.pdf Click to show the corresponding preview/stream application/pdf 722.33KB 2818
Author Hossain, Mohammad A
Karunaratne, Neil Dias
Title On Export-Led Growth: Is Manufacturing Exports a New Engine of Growth for Bangladesh?
School, Department or Centre School of Economics
Institution The University of Queensland
Report Number Discussion Paper No 297
Publication date 2001-12-01
Start page 1
End page 32
Total pages 32
Publisher The University of Queensland
Language eng
Subject 340200 Applied Economics
Abstract/Summary The study attempts to empirically verify the export-led growth hypothesis for Bangladesh. In this context, we examine whether manufacturing exports has become a new engine of export-led growth replacing total exports, as claimed by the so-called de novo hypothesis. The empirical analysis, based on the vector error correction modelling (VECM), suggests that both total exports and manufacturing exports have both long run and contemporaneous effects on the growth of GDP as well as manufacturing output. According to the non-nested tests, total exports emerges as the engine of export-led growth (i.e., GDP). For manufacturing output, however, both total exports and manufacturing exports emerge as engines of growth. Therefore, manufacturing exports is not the sole determinant of the export-led growth for Bangladesh.
Keyword De novo hypothesis
Encompassing principle
Export-led growth
'General to specific' modelling
Innovation accounting
Non-nested tests
Vector error correction modelling
References Athukorala, P., 1998, 'Export Response to Liberalisation: The Sri Lankan Experience,' Hitotsubashi Journal of Economics, 39, 49-65. Bahmani-Oskooee, M., H. Mohtad, and G. Shabsigh, 1991: 'Exports, Growth and Causality in LDCs: A Re-examination,' Journal of Development Economics, 36, 405-15. Balassa, B., 1985: 'Exports, Policy Choices, and Economic Growth in Developing Countries after the 1973 Oil Shock,' Journal of Development Economics, 18, 23-35. Banerjee, A., J.J. Dolado, J.W. Galbraith, and D. F. Hendry, 1993: Cointegration, Error Correction , and the Econometric Analysis of Non-Stationary Data, Oxford University Press, Oxford. Bhagawati, J.N, 1988, 'Export-promoting Trade Strategies: Issues and Evidence,' The World Bank Research Observer. Bhargava, A., 1986: 'On the Theory of Testing for Unit Roots in Observed Time Series,' Review of Economic Studies, 53, 369-84. Cox, D.R., 1961: 'Tests of separate Families of Hypotheses,' Proceedings of the Fourth Berkeley Symposium on Mathematical Statistics and Probability, Vol. 1, University of California Press, Berkeley, MA, 105-23. Cox, D.R., 1962: 'Further results on Tests of Separate Families of Hypotheses,' Journal of Royal Statistical Society, B24, 406-24. Davidson, R. and J. MacKinnon, 1982: 'Some Non-nested Hypothesis Tests and the Relations Among Them,' Journal of Economic Studies, 49, 551-65. Davidson, R. and J.G. MacKinnon, 1993: Estimation and Inference in Econometrics, New York: Oxford University Press. Doran, H., 1993: 'Testing Non-nested Models,' American Journal of Agricultural Economics, 75, 95-103. Dornbusch, R., 1974: 'Tariffs and Non-traded Goods', Journal of International Economics, 4, 177-85. Dornbusch, R., 1992: 'The Case for Trade Liberalisation of the Developing Countries', Journal of Economic Perspectives, 6(1), 69-87. Doyle, E., 1998: 'Export-Output Causality: The Irish Case,1953-1993,' Atlantic Economic Journal, 26, forthcoming. Edwards, S., 1993: 'Openness, Trade Liberalisation, and Growth in Developing Countries,' Journal of Economic Literature, 31, 1358-93. Engle, R., and C. Granger, 1987: 'Co-integration and Error Correction: Representation, Estimation and Testing,' Econometrica, 55, 251-76. Fan, Y, and Q. Li, 1995: 'Bootstrapping J-type tests for Non-nested Models', Economics Letters, 48, 107-112. Ghirmay, T., R. Gravowski and S.C.Sharma, 2001: 'Exports, Investment, Efficiency and Economic Growth in LDC: An Empirical Investigation', Applied Economics, 33, 689-700. Godfrey, L.G. and M.H. Pesaran, 1983: 'Tests of Non-nested Regression Models,' Journal of Econometrics, 21, 133-54. Gonzalo, J., 1994: 'Five Alternative Methods for Estimating Long Run Relationships', Journal of Econometrics, 60, 203-33. Granger, C.W.J. and A.A. Weiss, 1983: 'Time Series Analysis of Error-Correction Models,' in S. Karlin, T. Amemiya, and L.A. Goodman (eds.), Studies in Econometrics, Time Series and Multivariate Statistics, Academic Press, New York. Helleiner, G.K., 1994: 'Introduction', in G.K. Helleiner (ed.) Trade Policy and Industrialisation in Turbulent Times, London, Routledge. Helleiner, G.K., 1995: Manufacturing for Exports in the Developing World: Problems and Possibilities, Routledge, London and New York. Heller, P.S. and R.C. Porter, 1978: 'Exports and Growth: An Empirical Re-investigation,' Journal of Development Economics, 5, 191-93. Hendry, D.F., 1995: Dynamic Econometrics, Oxford: Oxford University Press. Hossain, M.A. and N.D. Karunatne, 2001: 'Export Response to the Reduction of Anti-Export Bias: Empirics from Bangladesh', Mimeo, School of Economics, University of Queensland. Islam, M.N. and M. Iftekharuzzaman, 1996: 'Export-Growth Nexus in a Small Open Economy: The Case of Bangladesh', in Weis, C.E. and A. Wahid (eds.), The Economy of Bangladesh: Problems and Prospects, Wesport, CT: Praeger Publishing. Islam, M.N., 1998: 'Export Expansion and Economic Growth: Testing for Cointegration and Causality', Applied Economics, 30, 415-425. Johansen, S., and K. Juselius, 1990: 'Maximum Likelihood Estimation and inference on Cointegration-with Applications to the Demand for Money,' Oxford Bulletin of Economics and Statistics, 52, 169-210. Joshi, V., and I.M.D. Little, 1996: India's Economic Reforms 1991-2001, Delhi, Oxford University Press. Karunaratne, N.D., 1994: 'Growth and Trade Liberalisation in Australia - A VAR Analysis,' Rivista Internazionale Di Scienze Economiche E Commerciali, XLI, 625-51. Koop, G., M.H. Pesaran, and S.M. Porter, 1996: 'Impulse Response Analysis in Nonlinear Multivariate Models,' Journal Of Econometrics, 74, 119-47. Krueger, A.O., 1997: 'Trade Policy and Economic Development: How We Learn', American Economic Review, 87(1), 1-22. Krueger, A.O., 1998: 'Why Trade Liberalisation Is Good for Growth?' The Economic Journal,108, 513-22. Krugman, P.R., 1986: 'New Thinking about Trade Policy', in Krugman, P.R. (ed.), Strategic Trade Policy and the New International Economics, MIT Press, Cambridge, MA, 1-22. Krugman, P.R., 1987: 'Is Trade Policy Passe?'', Economic perspectives, 1, 131-44. Large-Scale Macro-Econometric Models, Amsterdam:North-Holland. Lee, K. and M.H. Pesaran, 1993: 'Persistence Profiles and Business Cycle Fluctuations in a Disaggregated Model of UK Output Growth,' Richerchie Economiche, 47, 293-322. Little, I.M.D., T. Scitovosky and M. Scott, 1970: Industry and Trade in Some Developing Countries: A Comparative Study, Oxford University Press for OECD, London. Luthkepohl, H. and R. E. Reimers, 1992: 'Impulse Response Analysis of Cointegrated Systems,' Journal of Economic Dynamics and Control, 16, 53-78. MacKinnon, J. G., 1982: 'Model Specification Tests and Artificial Regressions,' Journal of Economic Literature, 30, 102-46. MacKinnon, J. G., 1983: 'Model Specification Tests against Non-nested Alternatives,' Econometric Reviews, 2, 85-110. Maddala, G.S. and Kim, I-M., 1998: Unit Roots, Cointegration, and Structural Change, Cambridge: Cambridge University Press. Marin, D., 1992: 'Is Export-Led Growth Valid for Industrialised Countries?' Review of Economics and Statistics, 74, 678-87. McAleer, M., 1987: 'Specification Tests for Separate Models: A Survey,' in M. King and E.A. Giles (eds.) Specification Analysis in the Linear Model, Routledge and Keagan Paul, London, 146-96. Michaely, M., 1977: 'Export and Economic Growth: An Empirical Investigation,' Journal of Development Economics, 4, 49-53. Nelson, C.R. and C.I. Plosser, 1982: 'Trends and Random Walks in Macroeconomic Time Series,' Journal of Monetary Economics, 10, 139-62. Pesaran, H.M. and B. Pesaran, 1997: Microfit 4.0. An Interactive Econometric Software Package, Oxford University Press, Oxford. Pesaran, M.H. and Y. Shin, 1996: 'Cointegration and the Speed of Convergence to Equilibrium,' Journal of Econometrics, 71, 117-43. Phillips, P. C. B., 1991: 'Optimal Inference in Cointegrated Systems', Econometrica, 59, 283-306. Reidel, J., 1993: 'Vietnam: On the Trail of the Tigers', World Economy, 16(4), 401-23. Romer, P 1990: 'Endogenous Technical Change', Journal of Political Economy, 98, pp. 71-102. Shand, R. and M.Alauddin, 1997: Economic Profiles in South Asia: Bangladesh, Australian National University, Canberra. Sims, C., 1980: 'Macroeconomics and Reality,' Econometrica, 48, 1-48. Sims, C., 1981: 'An Autoregressive Index Model for the U.S. 1948-1975,' in J. Kmenta and J.B. Ramsey (eds.) Thomas, V., and J. Nash, 1991: 'Reform of Trade Policy: Recent Evidence from Theory and Practice', The World Bank Research Observer, 2(6), 219-40. UNCTAD, 1989: Trade and Development Report 1989, Geneva. Weiss, J., 1992: 'Export Response to Trade Reforms: Recent Mexican Experience', Development Policy Review, 10, 1, 43-60. Yaghmaian, B., 1994: 'An Empirical Investigation of Exports, Development and Growth in Developing Countries: Challenging the Neo-classical Theory of Export-led Growth,' World Development, 22, 1977-95. Zivot, E. and D.W.K. Andrews, 1992: 'Further Evidence on the Great Crash, the Oil Price Shock, and the Unit Root Hypothesis,' Journal of Business and Economic Statistics, 10, 251-270.
Additional Notes ISSN 1033-4661

Document type: Department Technical Report
Collection: Discussion Papers (School of Economics)
Version Filter Type
Citation counts: Google Scholar Search Google Scholar
Access Statistics: 937 Abstract Views, 2818 File Downloads  -  Detailed Statistics
Created: Thu, 05 Feb 2004, 10:00:00 EST by Belinda Weaver (EA) on behalf of Marketing, Outreach and Corporate Services