Labor Demand and Export-Oriented Industrialization of Bangladesh

Abstract

This thesis based on the findings of a study on labor demand and export-oriented industrialization in Bangladesh at the time of 1992-93 to 2016-17. For this persistence, secondary data from different sources (BBS, WDI, EPB, BER, WB, BB, etc) for the time duration 1992-2017 has been composed and analyzed through econometric tools. The test approves that the disturbance terms are normally distributed. To detect that the data suffer from multicollinearity, heteroscedasticity, and autocorrelation problem, the diagnostic test has been adopted. From the diagnostic test, it is detected that while the data were free from heteroscedasticity and autocorrelation problems, however, the data suffer from severe multicollinearity problem. The multi-collinearity problem is removed using remedial measures. The Unit root test has been detected to test the stationarity of the composed data. Among different unit root test, ADF-test is adopted. The test displays that the data are stationary at the first difference level for export-oriented industrialization and the second difference level for labor demand. The Johansen co-integration test is adapted to test whether the data are cointegrated at any level. The test results approve that six variables are cointegrated on labor demand and one variable cointegrated on export-oriented industrialization. The Granger causality test under VAR (Vector Autoregressive Regression) framework displays the variable has a unidirectional causal relationship with the dependent variable where all independent variables lead, and the dependent variable follows. However, these relationships have found a statistically significant positive impact of labor demand and export-oriented industrialization in Bangladesh. Thus, there is a dynamic relationship between domestic labor demand, export, and economic progress in Bangladesh.