The Impact of Revenue Gap on Economic Growth: A Case Study of Bangladesh

Abdul Muyeed, Chandan Kumar Barman

Abstract


Purpose: The revenue of a country is the indispensable component with which an economy is managed and run. The purpose of the study was to inquire the relationship between revenue gap and economic growth of the economy of Bangladesh. This study investigated the impact of revenue gap on the economy of Bangladesh.

Methodology: In order to explore the impact of revenue gap on the economic growth of Bangladesh, the data was taken from national revenue board of Bangladesh and World bank covering the time period 1972-2010. Stationarity of the data was assessed by the unit root test or Dickey-Fuller (DF) test. Autoregressive distributed lag (ARDL) model was used to establish the relationship between revenue gap and economic growth. The Akaike’s Information Criterion (AIC) and Bayesian Information Criteria (BIC) were used to identify the best ARDL model. The error correction model (ECM) was used to establish the co-integrating relationship between the variables

Findings: It is evident from the findings of this study that there is a significant relationship between revenue gap and the economic growth of the Bangladesh. The coefficient of revenue gap (RG) to gross domestic product (GDP) is found -2599198 and p value is 0.004 (<0.05) which indicates the revenue gap has significant negative effect on economic growth of Bangladesh. It is also exhibited that there is a significant positive relationship between foreign direct investment (FDI) and the growth of the economy of Bangladesh. The coefficient of FDI to GDP is 826945.3 and p value is 0.001 (<0.005) that indicates the FDI has a positive significant effect on the economic growth of Bangladesh.

Research limitations: This study focuses only on the impact of revenue gap on the economic growth of Bangladesh. It is found that revenue gap affects economic growth but economic growth is also affected by numerous factors. Moreover, the study has not identified the threshold level above which revenue gap will be harmful for the economic growth. So, this is one of the limitations of the study which paves the way of further research.

Originality/Value: This study investigates the impact of revenue gap on the economic growth of Bangladesh using autoregressive distributed lag (ARDL) model and error correction model (ECM). To the best of the researcher’s knowledge, there has been no study conducted in this concern.

 

Keywords: Revenue; Revenue Gap; Foreign Direct Investment; Economic Growth; Time Series; Autoregressive Distributed Lag Model; Error Correction Model.

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[PT]

Título: "
O impacto da diferença de receita no crescimento econômico: um estudo de caso de Bangladesh"

Resumo

Objetivo: A receita de um país é o componente indispensável com o qual uma economia é gerenciada e administrada. O objetivo do estudo foi investigar a relação entre a diferença de receita e o crescimento econômico da economia de Bangladesh. Este estudo investigou o impacto da diferença de receita na economia de Bangladesh.
Metodologia: Para explorar o impacto da diferença de receita no crescimento econômico de Bangladesh, os dados foram coletados do conselho nacional de receita de Bangladesh e do Banco Mundial, cobrindo o período 1972-2010. A estacionariedade dos dados foi avaliada pelo teste de raiz unitária ou teste de Dickey-Fuller (DF). O modelo de atraso distribuído autoregressivo (ARDL) foi usado para estabelecer a relação entre diferença de receita e crescimento econômico. O Critério de Informação de Akaike (AIC) e o Critério de Informação Bayesiano (BIC) foram usados para identificar o melhor modelo de ARDL. O modelo de correção de erros (ECM) foi utilizado para estabelecer a relação de co-integração entre as variáveis
Resultados: É evidente a partir das conclusões deste estudo que existe uma relação significativa entre a diferença de receita e o crescimento econômico do Bangladesh. O coeficiente de diferença de receita (RG) com o produto interno bruto (PIB) é encontrado -2599198 ep valor é 0,004 (<0,05), o que indica que a diferença de receita tem efeito negativo significativo no crescimento econômico de Bangladesh. Também é mostrado que existe uma relação positiva significativa entre o investimento direto estrangeiro (IDE) e o crescimento da economia de Bangladesh. O coeficiente de IDE para o PIB é 826945,3 ep valor é 0,001 (<0,005) que indica que o IDE tem um efeito significativo positivo no crescimento econômico de Bangladesh.
Limitações: Este estudo se concentra apenas no impacto da diferença de receita no crescimento econômico de Bangladesh. Verifica-se que a diferença de receita afeta o crescimento econômico, mas o crescimento econômico também é afetado por vários fatores. Além disso, o estudo não identificou o limite acima do qual a diferença de receita será prejudicial para o crescimento econômico. Portanto, essa é uma das limitações do estudo que abre o caminho para futuras pesquisas.
Originalidade/valor: Este estudo investiga o impacto da diferença de receita no crescimento econômico de Bangladesh usando o modelo de atraso distribuído autoregressivo (ARDL) e o modelo de correção de erros (ECM). Para o melhor conhecimento do pesquisador, não houve estudo realizado sobre essa preocupação.


Palavras-chave: Receita; Lacuna de receita; Investimento estrangeiro direto; Crescimento econômico; Séries temporais; Modelo de Atraso Distribuído Autoregressivo; Modelo de correção de erros.


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