The impact of macroeconomic determinants of export earnings in the South Asia: A study on Bangladesh, India and Pakistan

Abstract

The expansion of export earning has been emerged comparing to the previous decades in the South Asian developing countries. The study has been focused on three prominent South Asian countries, such Bangladesh, India, and Pakistan which formerly known as a unique geographical region "Indian Sub-continent". The countries have been chosen purposively as having identical pattern of socio-economic behaviours. The main objective of the present study is to estimate the impact of macroeconomic determinants (exchange rate, inflation rate and interest rate) on export earning of these economies. The time series data (1971-2019) was collected from several secondary sources, such as the World Development Indicators (WDI), Bangladesh Economic Review, Economic Survey of India, Pakistan Economic Survey, other relevant literatures, and online sources. Results of the study had been analysed through multivariable linear regression model (OLS). Researchers also postulated the econometric reliability tests of OLS model. In most cases the dependent variable export earning was recommended for establishing the theoretical relationship with the independent variables, such as exchange rate, inflation rate and interest rate. In case of Bangladesh, only the exchange rate implied significant relation, however; there had excellent results for India demonstrating significant for all independent variables. Pakistan, on the other hand, has a number of noteworthy correlations with macroeconomic features that are both relevant and appropriate to the current Pakistan economy.