Causal relationship of economic factors with GDP growth of two emerging markets of South Asia: Bangladesh and India

Tanjila Tabassum

Global Business and Economics Review, 2019, vol. 21, issue 6, 798-813

Abstract: Substantial change in world economy in last few decades has made emerging markets more influential than ever before. This study tries to investigate causal relationship of three economic factors (GCF, FDI, and trade) with GDP growth of two emerging markets of South Asia: Bangladesh and India. External factors like globalisation (KOF index) and financial crisis (VIX index) have also been incorporated as and where deemed necessary. Time series data (1977-2015) of both countries taken from sources like World Development Indicator have been analysed. The results of Granger Causality test suggest that: 1) Trade and GDP growth granger cause each other; 2) GCF and KOF granger cause GDP growth; 3) FDI for India has bidirectional relationship with GDP growth for India.

Keywords: GCF; trade; FDI; globalisation; emerging markets; time series data; causality test; stationary. (search for similar items in EconPapers)
Date: 2019
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