Does external dependency impact economic growth? Evidence from an emerging economy

Mahamuda Firoj (), Abeda Sultana () and Md. Harun Ur Rashid ()
Additional contact information
Mahamuda Firoj: International Islamic University Chittagong (IIUC)
Abeda Sultana: Premier University
Md. Harun Ur Rashid: International Islamic University Chittagong (IIUC)

SN Business & Economics, 2024, vol. 4, issue 3, 1-23

Abstract: Abstract In this era of globalization, attention has been paid to the ways of providing external finance to support the growth path of developing countries. Hence, this study aims to measure the external dependency of economic growth via an assessment of the role of the various external factors, contributing to Bangladesh’s economic growth. To this end, an Auto-Regressive Distributed Lag (ARDL) approach was employed to analyze time series data from 1976 to 2021. The study revealed that external determinants like foreign remittances, foreign direct investment (FDI), exports, and foreign aid drive the economic growth of Bangladesh progressively. In contrast, external debt and imports adversely affect the growth of the Bangladeshi economy. The study recommends that policymakers undertake the necessary steps to provide adequate socioeconomic infrastructure, a sound environment for international trade, and overall, a sound macroeconomic condition. These initiatives help to increase the inflow of foreign direct investments, foreign remittances, and export earnings, thereby decreasing the dependency on external debts in the financing of deficit budgets.

Keywords: Economic growth; Remittance; Foreign direct investment; Exports; Foreign aid; Foreign debt (search for similar items in EconPapers)
JEL-codes: B22 F24 F31 F43 O11 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s43546-024-00633-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:snbeco:v:4:y:2024:i:3:d:10.1007_s43546-024-00633-6

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43546

DOI: 10.1007/s43546-024-00633-6

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().