Bangladesh Bank Training Academy Journal

Abstract

This study examines the effect of imported capital goods on manufacturing exports in Bangladesh using annual time series data from FY1991 to FY2023. The ARDL (auto-regressive distributed lag) bound test approaches applied to investigate the symmetric relationship between manufacturing expo rts, imported capital goods, exchange rate, and trade openness. The results of the empirical analysis suggest that imported capital goods and trade openness have a positive influence on manufacturing exports. On the other hand, the econometric relationship gives the evidence that exchange rate depreciation has a negative impact on manufacturing exports. Finally, we recommend that the government should implement a comprehensive trade policy with a particular focus on the import policy for capital goods. This will help to improve the manufacturing export performance as a growth driver of the economy.