Bangladesh Bank Training Academy Journal

Abstract: The purpose of this paper is to investigate the determinants of export and imports flows to Bangladesh with SAARC member countries using panel data estimation technique and applying with the Gravity Model Approach. Constructing two gravity models separately for exports and imports of Bangladesh with other SAARC countries, the study was conducted based on a Panel data set comprised of other 7 member countries of SAARC for total 11(eleven) years from 2006 to 2016. Being the workhorse of empirical international trade and its robustness with versatility makes the Gravity model essential tool to analyze policy issues regarding trade. Due to academic popularity of Gravity model, it has been used in the paper to assess the bilateral trade relation between ountries. The Gravity Model has been estimated using three techniques of panel data Pooled OLS, fixed effects and random effects. Fixed effect model is used to find the impact of variables over time and random effect model is used to capturethe effect of invariant variables. Applying F-test, Brusch-Pegan LM test and Hausman test, the study finds out, fixed effect is suitable for the export model and random effect for the import model. The estimated result shows that the significant determinants of Bangladesh's exports with SAARC member countries are: GDP, Real exchange rate, Distance and Border and except Border all other variables are found significant for imports.

Citation: Rapti, S. S. (2018). Gravity model analysis on export and import of Bangladesh with SAARC countries: Panel data approach. Thoughts on Banking and Finance, 7(1), 9–33.

Abstract: Although different concepts and theories of firm growth have been developed through the workings of diverse group of researchers, there is no single overarching model exists that can explain best about the growth matter of small firms. Therefore, the literature about small firm growth and performance are very fragmented and inconsistent. Based on the concept of the theory of 'Resource Based View (RBV)' current research formulated a research framework in order to examine how the resources like market orientation strategy and managerial capability of owner-manager affect financial growth of small firms operating in Bangladesh. Data was collected through self-administration from 407 owner-manager of small firms operating in three broad divisions of Bangladesh. Using partial least squares analysis, the paper found that both market orientation and managerial capability has strong positive relation with small firm financial growth. The paper also uncovered that government and private organiztion support do not moderate the relationships between market orientation, managerial capability and small firm financial growth. In fostering small firm growth in future, government and private organization should increase their financial and non-financial support with good number of initiatives.

Citation: Hossain, M. M. (2018). Market orientation, managerial capability and small firm financial growth in Bangladesh: Moderating effect of government and private organization support. Thoughts on Banking and Finance, 7(1), 34–73.

Abstract: We empirically examine the dynamic causal relationship between total debt, public investment and export in Bangladesh during the period of 1981 to 2015. We specifically investigate the impact of accelerating total debt on public investment. Considering the significance of export performance in Bangladesh, we also examine the debt export causality. A Granger causality based Vector Error Correction Model (VECM) is employed to examine the existence of causality among the variables. The results reveal no causality evidence, running from total debt and export to public investment in the long run. However, there exists a uni directional causality both from export and public investment to total debt in the long run. Similar to the long run, total debt and export have no impact on public investment in the short run as well. Therefore, our results suggest that total debt has no positive impact on public investment, neither in the short run nor in the long run in Bangladesh.

Citation: Chowdhury, M., & Hossain, S. M. (2018). The debt-public investment and export relationship in Bangladesh: A VECM approach. Thoughts on Banking and Finance, 7(1), 74–92.

Abstract: An analysis of the impact of government policies on economic development is very important for further policy decision. This paper attempts to analyse such impact in the context of Bangladesh for the period of 1972-2015. It is observed that the government policies in Bangladesh drastically shifted from socialist to market-oriented economic system in the mid-1970s that emphasised on private sector-led export-oriented industrialisation strategy, instead of public sector-led import substitution industrialisation strategy. Governments provided lots of facilities to the industrial sector including duty free import of industrial raw materials and machinery. As a result, the share of industrial sector in GDP increased largely from 10 percent in 1973 to 32 percent in 2015. The GDP growth increased gradually from around 3 percent in 1973 to above 6 percent in 2015. The inflation rate significantly reduced from around 54 percent in 1973 to around 6 percent in 2015.

Citation: Sarker, M. M. I., Naser, M. S., Halim, M. A., & Hossain, M. S. (2018). Impact of government policies on economic development in Bangladesh. Thoughts on Banking and Finance, 7(1), 93–116.

Abstract: Monetary policy maker adjusts its policy instruments to reach the policy objectives under the guideline of a monetary policy rule. In this context, monetary policy rule could be better described by monetary policy reaction function.The purpose of this study is to examine Bangladesh Bank's monetary policy reaction function applying VAR model over the period of 2004m1 to 2017m11. The results show that the call money rate has positive and significant response to a shock to the inflation gap, the exchange rate gap or the lagged call money rate, while it responds negatively to a shock of output gap. Similar results have been found when we re-estimate the model using Treasury bill rate. These outcomes suggests that we can apply and extend the Taylor rule using inflation gap, output gap, exchange rate and lagged interest rate in case of Bangladesh. The study has also an important policy implication of choosing the treasury bill rate as the policy instrument in implementing the monetary policy

Citation: Begum, L. A., Sultana, N., Hassan, R., & Faruk, O. (2018). Estimating monetary policy reaction function for Bangladesh: AVAR model analysis. Thoughts on Banking and Finance, 7(1), 117–134.