Nazim Ullah, Md. Akther Uddin


Growth spillover on neighboring country has been studied recently but not enough empirical literature to support this. More importantly, how regional power like India can affect its next-door neighbor Pakistan, Bangladesh, Nepal, Bhutan and Sri Lanka. Using Bangladesh as a case study, this study employs an error correction model derived from standard time series technique called “Auto Regressive Distributed Lag” (ARDL) proposed by Pesaran-Shin-Smith (2001). Our study has applied a time series data over the period 1975–2014. This study extends existing literature by focusing on growth spillover effect on neighboring country. By using the ARDL technique, the findings indicate that there is a long-term relationship between Indian growth and growth of Bangladesh. It can be argued that Indian growth effects on growth of Bangladesh and it is found statistically significant. A number of policy recommendations have been proposed in order to further strengthen the relationship between these two countries.


ARDL; Bangladesh; Growth Spillover; India

Full Text:



Adler, G. & Sosa, S. (2012). Intra-Regional spillovers in South America: is Brazil systemic after all? IMF Working Paper, Western Hemisphere, WP/12/145

Afzal, M., Malik, M. E., Butt, A. R., & Fatima, K. (2013). Openness, inflation and growth relationships in Pakistan: An application of ARDL bounds testing approach. Pakistan Economic and Social Review, 51(1), 13-53.

Ahmed, S. & Ghani, E. (2007). South Asia’s growth and regional integration: an overview, South Asia Growth and Regional Integration, The World Bank, Rajiv Beri for Macmillan India Ltd. New Delhi.

Al-Mawali, N. (2015). Intra-Gulf Cooperation Council: Saudi Arabia Effect. Journal of Economic Integration, 30(3), 532-552.

Arora, V., & Vamvakidis, A. (2004). The Impact of US Economic Growth on the Rest of the World: How much does it matter? Journal of Economic Integration, 19(1), 1-18.

Arora, V., & Vamvakidis, A. (2005). How much do trading partners matter for economic growth? IMF staff papers, 52(1), 24-40.

Arora, V., & Vamvakidis, A. (2011). China's economic growth: International spillovers. China & World Economy, 19(5), 31-46.

Behar, A. (2008). Neighborhood growth effects: an annual panel data approach. Background paper, Reshaping Economic Geography.

Cecchetti, S. G., & Kharroubi, E. (2012). Reassessing the impact of finance on growth, Bank of International Settlement (BIS) working paper, paper no. 381.

Dabla-Norris, E., Brumby, J., Kyobe, A., Mills, Z., & Papageorgiou, C. (2012). Investing in public investment: an index of public investment efficiency. Journal of Economic Growth, 17(3), 235-266.

Ding, D., & Masha, I. (2012). India’s growth spillovers to South Asia, IMF Working Paper, Asia and Pacific Department, WP/12/56

Dunne, J. P., & Tian, N. (2015). Conflict, Economic Growth and Spillover Effects in Africa (No. 561).ERSA working paper.

Fischer, S. (1993). The role of macroeconomic factors in growth. Journal of monetary economics, 32(3), 485-512.

Garratt, A., Robertson, D., & Wright, S. (2006). Permanent vs transitory components and economic fundamentals. Journal of Applied Econometrics, 21(4), 521-542.

Gujarati, D. N. (2009). Basic econometrics. Tata McGraw-Hill Education.

Gurara, D. Z. & Ncube, M. (2013). Global economic spillovers to Africa: a GVAR approach, Working Paper Series, Kayizzi-Mugerwa (eds.). Retrieved

form on 24/03/2016

Iqbal, N., & Nawaz, S. (2009). Investment, inflation and economic growth nexus. The Pakistan Development Review, 48(4), 863-874.

Islam, N. (2004). Indo-Bangladesh economic relations: some thoughts. Economic and Political Weekly, 4069-4075

Kee, H. L. (2014). Local intermediate inputs and the shared supplier spillovers of foreign direct investment. The World Bank.

Khan, T, & Ding, X. (2016). South Asia, Global Economic Prospects, World Bank, Retrieved from on 24/03/2016

Law, S. H., & Singh, N. (2014). Does too much finance harm economic growth? Journal of Banking & Finance, 41, 36-44.

Namazi, M., & Salehi, M. (2010). The Role of Inflation in Financial Repression: Evidence of Iran. World Applied Sciences Journal, 11(6), 653-661.

Odhiambo, N. M. (2009). Finance-growth-poverty nexus in South Africa: A dynamic causality linkage. The Journal of Socio-Economics, 38(2), 320-325.

Paradhan, J. P. (2008). Indian direct investment in developing countries: emerging trends and development impacts, Institute for Studies in Industrial development, Retrieved from on 27/03/2016

Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326.

Roberts, M., & Deichmann, U. (2009). International growth spillovers, geography and infrastructure. The World Bank.


  • There are currently no refbacks.

Copyright (c) 2019 Nazim Ullah, Md. Akther Uddin

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

  Journal of South Asian Studies
ISSN: 2307-4000 (Online), 2308-7846 (Print)
© ESci Journals Publishing. All Rights Reserved.