About this Journal Submit a Manuscript Table of Contents
Economics Research International
Volume 2012 (2012), Article ID 463856, 10 pages
http://dx.doi.org/10.1155/2012/463856
Research Article

Impact of Foreign Direct Investment, Trade Openness, Domestic Demand, and Exchange Rate on the Export Performance of Bangladesh: A VEC Approach

College of International Management, Ritsumeikan Asia Pacific University, 1-1 Jumonjibaru, Bepp-hi, Oita-ken, Japan

Received 29 March 2012; Revised 16 September 2012; Accepted 16 September 2012

Academic Editor: James E. Payne

Copyright © 2012 Bishnu Kumar Adhikary. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Linked References

  1. A. B. Kumar, “FDI, trade openness, capital formation, and economic growth in Bangladesh: a linkage analysis,” International Journal of Business and Management, vol. 6, no. 1, pp. 16–28, 2011.
  2. D. Papageorgiou, Liberalizing Foreign Trade: Lessons of Experience in the Developing World, Blackwell, Oxford, UK, 1991.
  3. J. Weiss, “Export response to trade reform: recent Mexican experience,” Development Policy Review, vol. 10, no. 1, pp. 43–60, 1992. View at Scopus
  4. A. U. Santos-Paulino, “Trade liberalization and export performance in selected developing countries,” Studies in Economics 0012, Department of Economics, University of Kent, Canterbury, UK, 2000.
  5. N. Ahmed, “Export response to trade liberalization in Bangladesh: a cointegration analysis,” Applied Economics, vol. 32, no. 8, pp. 1077–1084, 2000. View at Scopus
  6. J. Niemi, “The effects of trade liberalization on ASEAN agricultural commodity exports to the EU,” in Proceedings of the 77th European Association of Agricultural Economists Seminar, No. 325 (EAAE '01), August 2001.
  7. M. A. Babatunde, “Can trade liberalization stimulate export performance in Sub-Saharan Africa?” Journal of International and Global Economic Studies, vol. 2, no. 1, pp. 68–92, 2009.
  8. M. R. Agosín, “Trade policy reform and economic performance: a review of the issues and some preliminary evidence,” UNCTAD Discussion Papers 41, UNCTAD, Geneva, Switzerland, 1991.
  9. D. Greenaway and D. Sapsford, “What does liberalisation do for exports and growth?” Weltwirtschaftliches Archiv, vol. 130, no. 1, pp. 152–174, 1994. View at Publisher · View at Google Scholar · View at Scopus
  10. M. Shafaeddin, “The impact of trade liberalization on export and GDP in least developed countries,” UNCTAD Discussion Papers 85, UNCTAD, Geneva, Switzerland, 1994.
  11. B. E. Moon, Exports, Outward-oriented Development, and Economic Growth, Department of International Relations, Leigh University, Bethlehem, Pa, USA, 1997.
  12. O. Morrissey and M. Andrew, Explaining Africa's Export Performance-Taking a New Look, https://www.gtap.agecon.purdue.edu/resources/download/2643.pdf, 2006.
  13. M. Dritsaki, C. Dritsaki, and A. Adamopoulos, “A causal relationship between trade, foreign direct investment, and economic growth for greece,” American Journal of Applied Science, vol. 1, no. 3, pp. 230–235, 2004. View at Publisher · View at Google Scholar
  14. R. K. Sharma, “Export growth in India: has FDI played a role?” Economic Growth Center Working Paper 816, Yale University, Connecticut, Conn, USA, 2000.
  15. X. Liu, C. Wang, and Y. Wei, “Causal links between foreign direct investment and trade in China,” China Economic Review, vol. 12, no. 2-3, pp. 190–202, 2001. View at Publisher · View at Google Scholar · View at Scopus
  16. Y. Xing, “Why is China so attractive for FDI? The role of exchange rates,” China Economic Review, vol. 17, no. 2, pp. 198–209, 2006. View at Publisher · View at Google Scholar · View at Scopus
  17. N. T. Xuan and Y. Xing, “Foreign direct investment and exports The experiences of Vietnam,” Economics of Transition, vol. 16, no. 2, pp. 183–197, 2008. View at Publisher · View at Google Scholar · View at Scopus
  18. R. Svensson, “Effects of overseas production on home country exports: evidence based on Swedish multinationals,” Weltwirtschaftliches Archiv, vol. 132, no. 2, pp. 304–328, 1996. View at Scopus
  19. P. A. Petri, M. G. Plummer, and J. H. Bergstrand, “The determinants of foreign direct investment: a survey with applications to the United States,” in Economic Development and Cooperation in the Pacific Basin: Trade Investment and Environmental Issues, H. Lee and D. W. Roland-Holst, Eds., pp. 233–250, Cambridge University Press, New York, NY, USA, 1988.
  20. F. S. T. Hsiao and M. C. W. Hsiao, “FDI, exports, and GDP in East and Southeast Asia-Panel data versus time-series causality analyses,” Journal of Asian Economics, vol. 17, no. 6, pp. 1082–1106, 2006. View at Publisher · View at Google Scholar · View at Scopus
  21. A. C. Arize, “The effects of exchange-rate volatility on U.S. exports: an empirical investigation,” Southern Economic Journal, vol. 62, no. 1, pp. 34–43, 1996. View at Scopus
  22. A. C. Arize, T. Osang, and D. J. Slottje, “Exchange-rate volatility and foreign trade: evidence from thirteen LDC's,” Journal of Business and Economic Statistics, vol. 18, no. 1, pp. 10–17, 2000. View at Scopus
  23. M. J. Bailey, G. S. Tavlas, and M. Ulan, “The impact of exchange-rate volatility on export growth: some theoretical considerations and empirical results,” Journal of Policy Modeling, vol. 9, no. 1, pp. 225–243, 1987. View at Scopus
  24. A. Asseery and D. A. Peel, “The effects of exchange rate volatility on exports. Some new estimates,” Economics Letters, vol. 37, no. 2, pp. 173–177, 1991. View at Scopus
  25. A. Abbott, A. C. Darnell, and L. Evans, “The influence of exchange rate variability on UK exports,” Applied Economic Letters, vol. 8, no. 1, pp. 47–49, 2001. View at Publisher · View at Google Scholar
  26. K. N. Wong and T. C. Tang, “Exchange rate variability and the export demand for Malaysia's semiconductors: an empirical study,” Monash University Discussion Paper 13/07, 2007.
  27. Asian Development Bank (ADB), Asian Development Outlook, ADB, Manila, Philippines, 2005.
  28. Y. W. Lai, “The role of domestic demand in the economic growth in Malaysia: a cointegration analysis,” International Economic Journal, vol. 18, no. 3, pp. 337–352, 2004. View at Publisher · View at Google Scholar
  29. A. Chakrabarti, “The determinants of foreign direct investment: sensitivity analyses of cross-country regressions,” Kyklos, vol. 54, no. 1, pp. 89–114, 2001. View at Scopus
  30. H. K. Nath, “Trade, foreign direct investment, and growth: evidence from transition economies,” Comparative Economic Studies, vol. 51, no. 1, pp. 20–50, 2009. View at Publisher · View at Google Scholar · View at Scopus
  31. E. Asiedu, “On the determinants of foreign direct investment to developing countries: is Africa different?” World Development, vol. 30, no. 1, pp. 107–119, 2002. View at Publisher · View at Google Scholar · View at Scopus
  32. P.-L. Tsai, “Determinants of foreign direct investment and its impact on economic growth,” Journal of Economic Development, vol. 19, no. 1, pp. 137–163, 1994.
  33. H. Yanikkaya, “Trade openness and economic growth: a cross-country empirical investigation,” Journal of Development Economics, vol. 72, no. 1, pp. 57–89, 2003. View at Publisher · View at Google Scholar · View at Scopus
  34. J. D. Sachs and W. Andrew, “Economic reform and the process of global integration,” Brookings Paper on Economic Activity, vol. 26, no. 1, pp. 1–118, 1995.
  35. P. Sahoo, “Foreign direct investment in South Asia: policy, trends, impact and determinants,” ADB Institute Discussion Paper 56, 2006.
  36. T. Beck and R. Levine, “Stock markets, banks, and growth: panel evidence,” Journal of Banking and Finance, vol. 28, no. 3, pp. 423–442, 2004. View at Publisher · View at Google Scholar · View at Scopus
  37. W. A. Fuller, Introduction to Statistical Time Series, John Wiley and Sons, New York, NY, USA, 1976.
  38. D. A. Dickey and W. A. Fuller, “Distributions of the estimators for autoregressive time series with a unit root,” Journal of the American Statistical Association, vol. 74, no. 366, pp. 1057–1072, 1979.
  39. P. C. B. Phillips and P. Perron, “Testing for a unit root in time series regression,” Biometrika, vol. 75, no. 2, pp. 335–346, 1988. View at Publisher · View at Google Scholar · View at Scopus
  40. S. Johansen, “Statistical analysis of cointegration vectors,” Journal of Economic Dynamics and Control, vol. 12, no. 2-3, pp. 231–254, 1988. View at Scopus
  41. S. Johansen, “Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models,” Econometrica, vol. 59, no. 6, pp. 1551–1580, 1991. View at Publisher · View at Google Scholar
  42. S. Johansen, Likelihood-based inference in Cointegrated Vector Autoregressive Models, Oxford University Press, New York, NY, USA, 1995.
  43. C. W. J. Granger, “Some recent developments in a concept of causality,” Journal of Econometrics, vol. 39, no. 1-2, pp. 199–211, 1988. View at Publisher · View at Google Scholar
  44. H. Akaike, “Power spectrum estimation through autoregressive model fitting,” Annals of the Institute of Statistical Mathematics, vol. 21, no. 1, pp. 407–419, 1969. View at Publisher · View at Google Scholar · View at Scopus
  45. M. Bahmani-Oskooee and S. Payesteh, “Budget deficits and the value of the dollar: an application of cointegration and error-correction modeling,” Journal of Macroeconomics, vol. 15, no. 4, pp. 661–677, 1993. View at Scopus
  46. J. G. Mackinnon, “Numerical distribution functions for unit root and cointegration tests,” Journal of Applied Econometrics, vol. 11, no. 6, pp. 601–618, 1996. View at Scopus
  47. O. P. Chimobi and U. C. Uche, “Export, domestic demand and economic growth in Nigeria: granger causality analysis,” European Journal of Social Sciences, vol. 13, no. 2, pp. 211–218, 2010. View at Scopus
  48. N. Prasanna, “Impact of foreign direct investment on export performance in India,” Journal of Social Science, vol. 24, no. 1, pp. 65–71, 2010.
  49. J. Martinez-Martin, “On the dynamics of exports and FDI: the Spanish internationalization process,” Working Paper 2010/10, Research Institute of Applied Economics, Barcelona, Spain, 2010.
  50. J. Duasa, “Asymmetric cointegration relationship between real exchange rate and trade variables: the case of Malaysia,” MPRA Paper 14535, 2009.
  51. A. M. Njong, “Investigating the effects of foreign direct investment on export growth in Cameroon,” in Proceedings of the UNECA Ad-hoc Expert Group Meeting Paper, Addis Ababa, Ethiopia, November 2008.
  52. H.-T. Wong, “Exports and domestic demand: some empirical evidence in ASEAN 5,” Labuan Bulletin of International Business and Finance, vol. 6, pp. 39–55, 2008.
  53. M. G. Mortaza and C. D. Narayan, “Foreign direct investment, trade liberalization and economic growth: empirical evidence from South Asia and implications for Bangladesh,” Working Paper Series 0712, Policy Analysis Unit, Bangladesh Bank, Dhaka, Bangladesh, 2007.