TY - JOUR A2 - Payne, James E. AU - Adhikary, Bishnu Kumar PY - 2012 DA - 2012/11/21 TI - Impact of Foreign Direct Investment, Trade Openness, Domestic Demand, and Exchange Rate on the Export Performance of Bangladesh: A VEC Approach SP - 463856 VL - 2012 AB - This paper investigates the impact of foreign direct investment (FDI), trade openness, domestic demand, and exchange rate on the export performance of Bangladesh over the period of 1980–2009 using the vector error correction (VEC) model under the time series framework. The stationarity of the variables is checked both at the intercept and intercept plus trend regression forms under the ADF and PP stationarity tests. The Johansen-Juselius procedure is applied to test the cointegration relationship between variables followed by the VEC regression model. The empirical results trace a long-run equilibrium relationship in the variables. FDI is found to be an important factor in explaining the changes in exports both in the short run and long-run. However, the study does not trace any significant causal relationship for the cases of trade openness, domestic demand, and exchange rate. The study concludes that Bangladesh should formulate FDI-led polices to enhance its exports. SN - 2090-2123 UR - https://doi.org/10.1155/2012/463856 DO - 10.1155/2012/463856 JF - Economics Research International PB - Hindawi Publishing Corporation KW - ER -