EXPORT-LED GROWTH (ELG) HYPOTHESIS: AN EMPIRICAL INVESTIGATION ON BANGLADESH

This article provides an empirical investigation of the Export-Led Growth (ELG) hypothesis for the Bangladesh economy. The ELG hypothesis posits that export growth is a major driver of overall economic growth. The study uses time-series econometric techniques to test the causal relationship between export growth and GDP growth in Bangladesh over a period of several decades. The research examines the various channels through which export growth can stimulate the wider economy, such as by generating foreign exchange, facilitating economies of scale, and promoting technological progress and efficiency gains. The paper's empirical findings are then discussed in the context of Bangladesh's development strategy, which has been heavily reliant on the export-oriented ready-made garment (RMG) sector. The analysis concludes by assessing the validity of the ELG hypothesis for Bangladesh and discusses the policy implications for sustaining long-term economic growth.

The Export-Led Growth (ELG) hypothesis has been one of the most influential ideas in development economics, and the experience of Bangladesh provides a compelling case study for its investigation. This paper undertakes a rigorous empirical test of this hypothesis. The study begins by providing a theoretical overview of the ELG literature, outlining the different causal pathways through which exports are expected to drive economic growth. The core of the article is an econometric analysis using several decades of time-series data for Bangladesh. It employs techniques such as Granger causality tests to formally investigate the direction of the causal relationship between export growth and GDP growth. The findings of the statistical analysis are then interpreted within the specific context of the Bangladeshi economy. The paper argues that the phenomenal growth of the RMG sector has been the primary engine of the country's economic progress, lending strong support to the ELG hypothesis. It discusses how the sector's demand for labor has been a major driver of poverty reduction and how its foreign exchange earnings have been crucial for financing the country's import needs. The paper concludes that its empirical investigation provides robust evidence in favor of the ELG hypothesis for Bangladesh. This finding has significant policy implications, underscoring the critical importance of maintaining and enhancing the competitiveness of the export sector, and the need for a strategy of export diversification to ensure the long-term sustainability of the country's growth model.