Trade, Industry and Economic Growth in Bangladesh

This study is unique as it considers industry value added as a possible source of economic growth in addition to export and import. The key research questions of this study are: to what extent trade and industry value added contribute to the economic growth of Bangladesh? Are there any causal and long run relationships among export, import, industry value added and gross domestic product in Bangladesh? As expected, the regression results show that growth rate of industry value added can contribute more than the growth rate of export and import to increasing the growth rate of GDP for Bangladesh. We find that there is cointegration and a long run relationship between GDP and industry value added in the bivariate cointegration test. We also perform causality tests. The results clearly show that only import and/or export cannot contribute to the economic growth unless industrial sector is taken into account.