Do technological innovation, foreign investment, trade and human capital have a symmetric effect on economic growth? Novel dynamic ARDL simulation study on Bangladesh
Preethu Rahman (),
Zhihe Zhang () and
Mohammad Musa ()
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Preethu Rahman: Shaanxi Normal University
Zhihe Zhang: Shaanxi Normal University
Mohammad Musa: Shaanxi Normal University
Economic Change and Restructuring, 2023, vol. 56, issue 2, No 25, 1327-1366
Abstract:
Abstract Bangladesh's economy has flourished a great deal during recent years, establishing itself as an enthralling market. This country's remarkable growth trajectory can be attributed to technological innovation, foreign direct investment, trade and human capital, all of which have significant impacts on its economic growth. Bangladesh's economic development has been poorly explored in previous studies due to the lack of integration between these dynamics. Does the question arise whether this growth factors have a symmetrical or non-symmetrical effect on Bangladesh's economic growth and policymaking? We conducted this study with the primary objective of evaluating how technological innovation, foreign direct investment, trade, and human capital affect Bangladesh's economic development. Based on time series data years spanning 1990 to 2020, this study used the dynamic ARDL simulation method to accomplish its objective. This novel approach allows users to examine possible counterfactual changes in variables based on the ceteris paribus theory, as well as to test cointegration, long- and short-run symmetric associations between variables. Research findings indicate that technological innovation and human capital have a long-run symmetric relationship with Bangladesh’s economic development. There is a significant correlation found between economic growth and all variables in the short run. To further check the robustness of the study we employed the nonlinear ARDL approach. Therefore, this study can undoubtedly be used by policymakers and the government as a basis for prioritizing and encouraging critical policy changes that will improve Bangladesh's economic development.
Keywords: Technological innovation; Foreign direct investment; Trade openness; Human capital; Economic growth; Dynamic ARDL simulations (search for similar items in EconPapers)
JEL-codes: O1 O2 O3 O4 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10644-022-09478-1
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