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Estimation of the Export Demand Function using Bilateral Trade Data

Author

Listed:
  • Mohammed Nur
  • Albert Wijeweera
  • Brian Dollery

    (Mohammed Nur, Albert Wijeweera and Brian Dollery are with School of Economics, University of New England, Armidale, NSW, 2351 Australia. Albert Wijeweera is the corresponding author. Email: awijewee@une.edu.au)

Abstract

Trade liberalization policy represents an important policy instrument for developing countries. However, existing empirical literature on the impact of trade liberalization is ambiguous and this uncertainty also extends to Bangladesh economy. Various studies have sought to estimate econometrically the export demand function for Bangladesh as a means of clarifying the effects of trade liberalization in that country. Unfortunately, no recent studies have examined the liberalization effect on disaggregated exports in Bangladesh. In order to remedy this neglect, this article examines the likely impacts of trade liberalization policies on the disaggregated export function in Bangladesh for the period 1973–2004. The main purpose is to examine whether bilateral export elasticities are significantly different between major trading partners. If this is indeed the case, then different policies should be implemented rather than a single trade policy to enhance exports. A secondary objective is to establish whether trade liberalization has had any impact on the export sector in Bangladesh.

Suggested Citation

  • Mohammed Nur & Albert Wijeweera & Brian Dollery, 2007. "Estimation of the Export Demand Function using Bilateral Trade Data," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 8(2), pages 249-264, December.
    • Handle: RePEc:sae:soueco:v:8:y:2007:i:2:p:249-264
    DOI: 10.1177/139156140700800204
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    References listed on IDEAS

    as
    1. Nasiruddin Ahmed, 2000. "Export response to trade liberalization in Bangladesh: a cointegration analysis," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 1077-1084.
    2. John Weiss, 1992. "Export Response to Trade Reform: Recent Mexican Experience," Development Policy Review, Overseas Development Institute, vol. 10(1), pages 43-60, March.
    3. Marquez, Jaime & McNeilly, Caryl, 1988. "Income and Price Elasticities for Exports of Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 306-314, May.
    4. Balassa, Bela, 1971. "Trade Policies in Developing Countries," American Economic Review, American Economic Association, vol. 61(2), pages 178-187, May.
    5. Amelia Santos-Paulino & A. P. Thirlwall, 2004. "The impact of trade liberalisation on exports, imports and the balance of payments of developing countries," Economic Journal, Royal Economic Society, vol. 114(493), pages 50-72, February.
    6. Rudiger Dornbusch, 1992. "The Case for Trade Liberalization in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 69-85, Winter.
    7. Michael Bleaney, 1999. "Trade reform, macroeconomic performance and export growth in ten Latin American countries, 1979-95," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(1), pages 89-105.
    8. Mohammad A. Hossain & Mohammad Alauddin, 2005. "Trade liberalization in Bangladesh: the process and its impact on macro variables particularly export expansion," Journal of Developing Areas, Tennessee State University, College of Business, vol. 39(1), pages 127-150, September.
    9. Bhagwati, Jagdish N, 1988. "Export-Promoting Trade Strategy: Issues and Evidence," The World Bank Research Observer, World Bank, vol. 3(1), pages 27-57, January.
    10. repec:syd:wpaper:2001-3 is not listed on IDEAS
    11. Abdelhak S. Senhadji & Claudio E. Montenegro, 1999. "Time Series Analysis of Export Demand Equations: A Cross-Country Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 46(3), pages 1-2.
    12. Choudhury, Riffat Zaman, 2001. "Export Demand Function of Bangladesh :An Econometric Exercise," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 27(3), pages 67-90, September.
    13. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Murad, S. M. Woahid, 2012. "Bilateral Export and Import Demand Functions of Bangladesh: A Cointegration Approach," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 35(1), pages 43-60, March.

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    More about this item

    Keywords

    JEL: C22; JEL: F13; JEL: F32; JEL: F43; Bangladesh; Export Demand Functions; Trade Liberalization;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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