Export diversification and economic growth in Bangladesh

Musharrat Azam, Samiha Azam — Wed, 15 Feb 2023 00:00:00 -0600

Although the growth in exports of Bangladesh over the past few decades has been exemplary, it is enormously concentrated on just one industry which is the Ready Made Garment (RMG) sector. This over dependence on just one sector for export earnings places Bangladesh in a vulnerable position. This study examined the relationship between export diversification and growth rate of the Gross Domestic Product (GDP) of Bangladesh using annual data from 1995 to 2020. The study utilized the Autoregressive Distributed Lag (ARDL) bounds test to cointegration approach to estimate the long run relationship and the error correction model to determine the existence of a short run relationship. The results from the study indicate that there exists a significant long run cointegrating relationship between overall export diversification and economic growth in Bangladesh. In the long term, if horizontal export diversification increases by 1%, the GDP growth rate shall rise by around 1.7%. Conversely, the short run relationship between export diversification and economic growth is proven to be insignificant. The results of this study implore that Bangladesh should implement strategies and policies that will diversify its exports and shift away from the dominance of just one exporting sector.

Does financial development and economic growth promote employment in Nigeria?

Babatunde Moses Ololade, Olabode Eric Olabisi — Thu, 31 Aug 2023 00:00:00 -0500

In most African countries, including Nigeria, employment generation has been a major challenge that poses a serious issue for the economic well-being of the people. Therefore, the aim of this paper is to investigate whether financial development and economic growth promote employment generation in Nigeria, covering 1999–2020. To investigate the relationship among financial development, economic growth, and employment in Nigeria, the Autoregressive Distributed Lags (ARDL) bound-testing estimation method was employed. This approach allows level I(0) and first difference I(1) macroeconomic data to be estimated without bias. It also offers the possibility of computing the dynamic error correction model (ECM). Our findings show a long-run relationship among financial development, employment rate, inflation rate, and economic growth in Nigeria. The result further shows that inflation has a negative and significant relationship with the employment rate. Also, financial development reveals a positive and significant relationship with employment. The result further shows that economic growth promotes employment in Nigeria. Following the results of our analysis, this study recommends, among other things, policy formulations on expansionary monetary policies that will ensure the availability of credits for the private sector. Also, stock market listing requirements for small and medium-sized businesses should be friendly to encourage small and medium-sized enterprises (SMEs) to list for access to finance. Also, policies that will drastically reduce the high rate of inflation should be implemented.

Journal of Empirical Studies

Export diversification and economic growth in Bangladesh

Does financial development and economic growth promote employment in Nigeria?