Determinant on Economic Growth in Developing Country: A Special Case Regarding Turkey and Bangladesh

Abstract

AbstractThis study delves into the complex interplay between gross domestic product (GDP) and key macroeconomic indicators in the contexts of Turkey and Bangladesh. By examining panel data spanning from 1981 to 2020 sourced from the World Bank, we investigate the causal relationships between GDP growth and various factors including population growth, inflation, literacy rate, natural resource utilization, investment, and foreign direct investment (FDI). Our research aims to address critical questions regarding the economic trajectories of these two emerging economies. Specifically, we seek to understand how different macroeconomic variables influence GDP growth in Bangladesh and Turkey, while also exploring the unique socio-economic landscapes of these nations. Methodologically, we employ the Dumitrescu–Hurlin panel causality test to analyze the causal relationships between GDP growth and the aforementioned macroeconomic indicators. Our findings reveal direct, statistically significant associations between GDP growth and these variables, with population growth emerging as a particularly influential factor. The implications of our study extend beyond empirical observations, offering valuable insights for policymakers and stakeholders seeking to foster sustainable economic development in both Bangladesh and Turkey. By identifying the key drivers of GDP growth and their impact on economic performance, our research contributes to the existing body of literature on economic development in emerging economies. In conclusion, this study sheds light on the intricate dynamics of GDP growth in Turkey and Bangladesh, highlighting the importance of understanding and leveraging macroeconomic indicators to promote inclusive and sustainable economic growth in these nations.