Title : An Empirical Investigation on the Time Series Behavior of Bangladesh-Sri-Lank Trade Deficit

Authors : Md. Sharif Hossain

Abstract : The trade relation of Bangladesh with SAARC countries specially with India, Pakistan and Sri-Lanka has become increasingly important and grown exceeding fast over the last few years. The Bangladesh statistics suggests that trade flows between Bangladesh–India, and Bangladesh-Pakistan are extremely imbalanced also the Bangladesh statistics indicates that the trade deficit between Bangladesh and Sri-Lanka are increasing from year to year. Different authors have been done a number of works on regarding trade relation between Bangladesh-India and Bangladesh-Pakistan. But until now no one conducted any econometric analysis to know the trade relation pattern between Bangladesh and Sri-Lanka. Thus to know the existence of long-term effect of trade deficit between Bangladesh and Sri-Lanka on economic development, in this paper a principal attempt has been made an empirical investigation on the time series behavior of the trade deficit by using modern econometric techniques. It performs a unit–root analysis and co-integration test on Bangladesh exports to and imports from Sri-Lanka. The tests results indicate that the hypothesis of stationarity is uniformly rejected for a variety of trade measures over a number of model specifications and also it has been found that the imports of Bangladesh from and exports to Sri-Lanka do not share the same stochastic trend. From the findings of this paper, the Government and politicians and other persons should to realize that they have to take decision from now to control the trade deficit between Bangladesh and Sri-Lanka.

Journal : Journal of Institute of Cost and Management Accountants of Bangladesh, . Volume : XXXIV Year : 2006 Issue : 1
Pages : 66-79 City : Edition : Editors :
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