The Impacts of Agricultural Trade on Economic Growth and Environmental Pollution: Evidence from Bangladesh Using ARDL in the Presence of Structural Breaks

Abstract

Agricultural trade significantly promotes the economic boom in developing countries. Extensive traditional agricultural production methods have increased the pressure on the agricultural environment by expanding agricultural trade, which has attracted the attention of many scholars. This study aims to empirically examine the impacts of agricultural trade on economic growth and agricultural environmental pollution in Bangladesh from 1972 to 2019, using an Auto Regressive Distributed Lag (ARDL) model with a structural break to examine the long-run and short-run determinants of agricultural environmental pollution in Bangladesh. The ARDL bounds analysis methodology showed that it does not support the hypothesis that agricultural trade led to environmental pollution in the long-run. The results suggest a relationship between economic growth, energy, and FDI towards agricultural environmental pollution, indicating a positive long-run relationship. Furthermore, in the short run, agricultural trade indicates positive drivers towards agricultural environmental pollution. Therefore, it is recommended that the enhancement of trade liberalization policies should ensure cleaner technologies and products that could help reduce environmental pollution.