Abstract:
This study has been carried out to observe the impact of financial development
and trade openness on GDP growth in Bangladesh by using annual data over the period
1976-2015. The analysis is based on the bound testing approach of co-integration
advanced by Pesaran et al (2001). The empirical results confirmed the validity of trade
led growth and financial led growth hypothesis in Bangladesh. A co-integrated
relationship between economic growth, trade openness and financial development was
noticed in both the long-run and short-runs. The analysis also showed the relationship
between trade openness and financial development through Granger causality test for
causal relationships in the period of study.
