Economic Relations between Bangladesh and Spain: An Empirical Analysis of Trade, Demographics, and Sectoral Growth (2000-2025)

Luis-Felipe Arizmendi

MPRA Paper from University Library of Munich, Germany

Abstract: This study evaluates the bilateral economic corridor between Bangladesh and Spain (2000–2025). Using an augmented gravity model with HAC standard errors, results reveal that Bangladesh’s export volume is highly elastic with respect to domestic GDP growth (β = 2.20) and decoupled from Spanish business cycles. Structural break analysis shows that post-2013 compliance reforms increased buyer trust, although growth elasticity is maturing. Building on evidence from sustainable finance, the paper argues that after Bangladesh’s LDC graduation in 2029, high-transparency ESG lending will be essential to meet EU requirements. The strategic recommendations, therefore, emphasize industrial upgrading and export diversification to sustain this important economic partnership.

Keywords: Bilateral trade; Augmented gravity model; LDC graduation; ESG compliance; Sustainable lending; Spain-Bangladesh relations. (search for similar items in EconPapers)
JEL-codes: F14 F16 F43 O15 (search for similar items in EconPapers)
Date: 2026-05-16
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