IDEAS home Printed from https://ideas.repec.org/a/sae/intare/v26y2023i2p185-207.html
   My bibliography  Save this article

Investigating the moderating impact of crime and corruption on the economic growth of Bangladesh: Fresh insights

Author

Listed:
  • Zhang Yu

    (66350Chang’an University, China; ILMA University, Pakistan)

  • Muhammad Umer Quddoos

    (66927Bahauddin Zakariya University, Pakistan)

  • Syed Abdul Rehman Khan

    (117819Xuzhou University of Technology, China)

  • Muhammad Munir Ahmad

    (66708Allam Iqbal Open University, Pakistan)

  • Laeeq Razzak Janjua

    (Poznan University of Economics and Business, Poland)

  • Muhammad Sajid Amin

    (54735The Islamia University of Bahawalpur, Pakistan)

  • Abdul Haseeb

    (384987The University of Haripur, Pakistan)

Abstract

This study investigates the moderating role of the corruption index with the impacts of foreign direct investment (FDI), unemployment, corruption, and crime rate on economic growth in Bangladesh from 1988 to 2019. The Augmented Dicky-Fuller (ADF) and Phillips-Peron (P-P) unit root tests were applied to check the stationary properties of the concerned variables. The auto regressor distribution lags approach is used to test the hypotheses. The results show that the corruption index as a moderator has a significant adverse impact on economic growth along with the other variables crime, and unemployment on economic growth. To put it simply, economic growth increases by decreasing corruption, unemployment, and crime rates. Similarly, FDI and trade openness appears as a catalyst for boosting economic growth, but the interaction variable of the trade and corruption index increases the trade costs that may slow down the economic growth. As among the pioneer attempts, the present study contributes to growing literature on the moderator role of the corruption index along with other determinants of economic growth by identifying the role of FDI inflows, trade, unemployment, and crime rates on economic growth in Bangladesh. These empirical findings are directed toward some critical policy implications that will help the governmental bodies and policymakers to achieve sustainable economic growth along with ensuring better employment opportunities and thereby control the crime and corruption rates in Bangladesh.

Suggested Citation

  • Zhang Yu & Muhammad Umer Quddoos & Syed Abdul Rehman Khan & Muhammad Munir Ahmad & Laeeq Razzak Janjua & Muhammad Sajid Amin & Abdul Haseeb, 2023. "Investigating the moderating impact of crime and corruption on the economic growth of Bangladesh: Fresh insights," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 26(2), pages 185-207, June.
    • Handle: RePEc:sae:intare:v:26:y:2023:i:2:p:185-207
    DOI: 10.1177/22338659221125696
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/22338659221125696
    Download Restriction: no
    File URL: https://libkey.io/10.1177/22338659221125696?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gründler, Klaus & Potrafke, Niklas, 2019. "Corruption and economic growth: New empirical evidence," European Journal of Political Economy, Elsevier, vol. 60(C).
    2. Kong, Qunxi & Peng, Dan & Ni, Yehui & Jiang, Xinyue & Wang, Ziqi, 2021. "Trade openness and economic growth quality of China: Empirical analysis using ARDL model," Finance Research Letters, Elsevier, vol. 38(C).
    3. Rodrik, Dani, 1999. "Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
    4. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    5. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    6. Lee, Jim, 2000. "The Robustness of Okun's Law: Evidence from OECD Countries," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 331-356, April.
    7. Méon, Pierre-Guillaume & Weill, Laurent, 2010. "Is Corruption an Efficient Grease?," World Development, Elsevier, vol. 38(3), pages 244-259, March.
    8. Sulemana, Iddisah & Kpienbaareh, Daniel, 2018. "An empirical examination of the relationship between income inequality and corruption in Africa," Economic Analysis and Policy, Elsevier, vol. 60(C), pages 27-42.
    9. Archana Singh & Narinder Pal Singh, 2017. "Crude oil market and global financial crisis - structural break and market volatility analysis," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 13(2), pages 203-216.
    10. Mohammad Habibullah Pulok & Moin Uddin Ahmed, 2017. "Does corruption matter for economic development? Long run evidence from Bangladesh," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 44(3), pages 350-361, March.
    11. Yusuf Opeyemi Akinwale, 2018. "An Empirical Analysis of Short Run and Long Run Relationships between Energy Consumption, Technology Innovation and Economic Growth in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 139-146.
    12. Mallam Isgogo Mohammed & Abbsinejad Hossein & Chukwudi C. Nwokolo, 2021. "Organized crime, corruption and the challenges of economic growth in the economic community of West African states," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 29(3), pages 1091-1101, August.
    13. Hamid NoghaniBehambari & Bitran Maden, 2021. "Unemployment insurance generosity and crime," Applied Economics Letters, Taylor & Francis Journals, vol. 28(13), pages 1076-1081, July.
    14. Bibhuti Sarker & Farid Khan, 2020. "Nexus between foreign direct investment and economic growth in Bangladesh: an augmented autoregressive distributed lag bounds testing approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-18, December.
    15. Grossman, Gene M & Helpman, Elhanan, 1990. "Trade, Innovation, and Growth," American Economic Review, American Economic Association, vol. 80(2), pages 86-91, May.
    16. Saqib Amin & Nawaz Ahmad, 2018. "Ethnic Diversity, Social Exclusion and Economic Determinants of Crimes: A Case Study of Pakistan," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(1), pages 267-286, November.
    17. Malanski, Leonardo Köppe & Póvoa, Angela Cristiane Santos, 2021. "Economic growth and corruption in emerging markets: Does economic freedom matter?," International Economics, Elsevier, vol. 166(C), pages 58-70.
    18. Osmani, S R, 2015. "The Growth-Equity Nexus in Bangladesh: An Analysis of Recent Experience," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 38(2), pages 1-59, June.
    19. Enrico Colombatto, 2003. "Why is Corruption Tolerated?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 16(4), pages 363-379, December.
    20. Rahman, Aminur & Kisunko, Gregory & Kapoor, Kapil, 2000. "Estimating the effects of corruption - implications for Bangladesh," Policy Research Working Paper Series 2479, The World Bank.
    21. KH Zhang, 2001. "Does Foreign Direct Investment Promote Economic Growth? Evidence From East Asia And Latin America," Contemporary Economic Policy, Western Economic Association International, vol. 19(2), pages 175-185, April.
    22. Maxwell Chukwudi Udeagha & Nicholas Ngepah, 2021. "The asymmetric effect of trade openness on economic growth in South Africa: a nonlinear ARDL approach," Economic Change and Restructuring, Springer, vol. 54(2), pages 491-540, May.
    23. Ibrahim Ngouhouo & Tii Nchofoung & Arsène Aurelien Njamen Kengdo, 2021. "Determinants of Trade Openness in Sub-Saharan Africa: Do Institutions Matter?," International Economic Journal, Taylor & Francis Journals, vol. 35(1), pages 96-119, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. M Julian Tama, 2024. "Interplay of Investment Dynamics and Corruption on Economic Growth in Asia-Pacific Nations," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 141-161.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dierk Herzer & Stephan Klasen & Felicitas Nowak-Lehmann D., 2006. "In search of FDI-led growth in developing countries," Ibero America Institute for Econ. Research (IAI) Discussion Papers 150, Ibero-America Institute for Economic Research.
    2. AM.Priyangani Adikari & Haiyun Liu & MMSA. Marasinghe, 2021. "Inward Foreign Direct Investment-Induced Technological Innovation in Sri Lanka? Empirical Evidence Using ARDL Approach," Sustainability, MDPI, vol. 13(13), pages 1-16, June.
    3. Preethu Rahman & Zhihe Zhang & Mohammad Musa, 2023. "Do technological innovation, foreign investment, trade and human capital have a symmetric effect on economic growth? Novel dynamic ARDL simulation study on Bangladesh," Economic Change and Restructuring, Springer, vol. 56(2), pages 1327-1366, April.
    4. Vu Manh Hoai Nguyen & Tin Huu Ho & Luan Huynh Nguyen & An Thi Ha Pham, 2023. "The Impact of Trade Openness on Economic Stability in Asian Countries," Sustainability, MDPI, vol. 15(15), pages 1-20, July.
    5. Abdullahi Ahmed & Enjiang Cheng & George Messinis, 2011. "The role of exports, FDI and imports in development: evidence from Sub-Saharan African countries," Applied Economics, Taylor & Francis Journals, vol. 43(26), pages 3719-3731.
    6. Ghazouani, tarek, 2018. "Re-examining the Foreign direct investment, Renewable energy consumption and Economic growth nexus: Evidence from a new Bootstrap ARDL test for Cointegration," MPRA Paper 89975, University Library of Munich, Germany.
    7. Rulia Akhtar & Muhammad Mehedi Masud & Nusrat Jafrin & Sharifah Muhairah Shahabudin, 2023. "Economic growth, gender inequality, openness of trade, and female labour force participation: a nonlinear ARDL approach," Economic Change and Restructuring, Springer, vol. 56(3), pages 1725-1752, June.
    8. Rosemary Stanley Taylor, 2020. "Foreign direct investment and economic growth. Analysis of sectoral foreign direct investment in Tanzania," African Development Review, African Development Bank, vol. 32(4), pages 699-717, December.
    9. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    10. Bhavesh Garg & Pravakar Sahoo, 2021. "DO DIFFERENT TYPES OF CAPITAL INFLOWS HAVE DIFFERENTIAL IMPACT ON OUTPUT? Evidence from Time series and Panel Analysis," IEG Working Papers 443, Institute of Economic Growth.
    11. Kouadio, Hugues Kouassi & Gakpa, Lewis-Landry, 2022. "Do economic growth and institutional quality reduce poverty and inequality in West Africa?," Journal of Policy Modeling, Elsevier, vol. 44(1), pages 41-63.
    12. Obadiah Jonathan Gimba & Mehdi Seraj & Huseyin Ozdeser, 2021. "What drives income inequality in sub‐Saharan Africa and its sub‐regions? An examination of long‐run and short‐run effects," African Development Review, African Development Bank, vol. 33(4), pages 729-741, December.
    13. Mohammad Salem Oudat & Ayman Abdalmajeed Alsmadi & Najed Massad Alrawashdeh, 2019. "Foreign direct investment and economic growth in Jordan: An empirical research using the bounds test for cointegration," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 11(1), pages 55-63, February.
    14. Isaac K. Ofori & Francesco Figari & Nathanael Ojong, 2023. "Towards sustainability: The relationship between foreign direct investment, economic freedom and inclusive green growth," Working Papers of the African Governance and Development Institute. 23/023, African Governance and Development Institute..
    15. Huiying Zhang & Xiaohui Yang, 2016. "Intellectual Property Rights and Export Sophistication," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-19, October.
    16. Frank Gyimah Sackey & Emmanuel Orkoh & Mohammed Musah, 2024. "Investigating the impact of institutional quality under the petroleum price deregulation policy regime on the economic growth of Ghana," SN Business & Economics, Springer, vol. 4(11), pages 1-21, November.
    17. Pablo Blanchard & Adriana Peluffo & Dayna Zaclicever, 2019. "Revisando el rol de los productos intermedios importados en la productividad: un análisis a nivel de empresa para Uruguay," Documentos de Trabajo (working papers) 19-03, Instituto de Economía - IECON.
    18. Pami Dua & B. N. GOLDAR & SMRUTI RANJAN BEHERA, 2011. "Foreign Direct Investment And Technology Spillover-- An Evaluation Across Different Clusters In India," Working papers 200, Centre for Development Economics, Delhi School of Economics.
    19. Mohammed DAOUDI, 2023. "Does foreign direct investment contribute to reducing unemployment in Algeria?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(635), S), pages 211-230, Summer.
    20. Ofori, Isaac K. & Figari, Francesco & Ojong, Nathanael, 2023. "Towards sustainability: The relationship between foreign direct investment, economic freedom and inclusive green growth," MPRA Paper 116956, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:intare:v:26:y:2023:i:2:p:185-207. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.hufs.ac.kr/user/hufsenglish/re_1.jsp .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.