The export–income relationship and trade liberalisation in Bangladesh

Bangladesh pursued a policy of import-substituting industrialisation until 1990 when trade was liberalised and exports promoted. This paper examines the impact of trade liberalisation on the export–income relationship using cointegration methods. Results show that trade liberalisation increased export growth but had no effect on the structure of the long-run export–income relationship. Impulse responses support the export-led growth hypothesis and Bangladesh should complete its trade liberalisation agenda to promote economic growth.