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The factors affecting Bangladesh's exports:evidence from the gravity model analysis

Author

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  • Mohammad Mafizur Rahman

    (University of Southern Queensland, Australia)

Abstract

This paper attempts to identify the factors that affect Bangladesh's exports. The panel data estimation technique and a generalized gravity model have been used to analyze Bangladesh's export trade pattern. A theoretical justification for using the gravity model in the analysis of bilateral trade has been reaffirmed. The estimated results reveal that the main contributors to Bangladesh's exports are the exchange rate, partner countries' total import demand and the openness of the Bangladesh economy. All these factors affect the country's exports positively. Transportation costs have negative but insignificant effect on Bangladesh's exports. The country specific effects show that neighboring countries' influence on the Bangladesh's exports is more than the influence of other distant countries. Therefore, Bangladesh should reduce trade barriers, pursue competitive devaluation of its currency, improve product quality and increase product varieties.

Suggested Citation

  • Mohammad Mafizur Rahman, 2010. "The factors affecting Bangladesh's exports:evidence from the gravity model analysis," Journal of Developing Areas, Tennessee State University, College of Business, vol. 44(1), pages 229-244, September.
    • Handle: RePEc:jda:journl:vol.44:year:2011:issue1:pp:229-244
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    Citations

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    Cited by:

    1. Ghulam Shabbir & Amjad Naveed & Muhammad Ali Khan & Shabib Haider Syed, 2022. "Does Peace Promote Bilateral Trade Flows? An Economic Analysis of Panel Data in Asian Perspective," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(1), pages 143-158, March.
    2. Amjad Naveed & Ghulam Shabbir & Shabib Haider Syed & Muhammad Ashfaq & Muhammad Ali Khan, 2022. "Can a path to peace promote export growth? Evidence from Pakistan and its trading partners," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(5), pages 3309-3324, October.
    3. Redwanur Rahman & Saleh Shahriar & Sokvibol Kea, 2019. "Determinants of Exports: A Gravity Model Analysis of the Bangladeshi Textile and Clothing Industries," FIIB Business Review, , vol. 8(3), pages 229-244, September.
    4. Sultan, Maryam & Munir, Kashif, 2015. "Export, Import and Total Trade Potential of Pakistan: A Gravity Model Approach," MPRA Paper 66621, University Library of Munich, Germany.
    5. Namra Awais, 2016. "Was the SAFTA (Phase II) Revision Successful? A Case Study of Bangladesh’s RMG Exports to India," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(1), pages 151-182, Jan-June.

    More about this item

    Keywords

    Gravity Model; Panel Data; Bangladesh's Exports;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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