Sabina Yasmin1, Asma Akter2
1 Lecturer of Economics, Asian University of Bangladesh, Ashulia, Savar, Dhaka-1341.
2 Assistant Professor of Economics, Asian University of Bangladesh, Ashulia, Savar, Dhaka-1341.
2 Assistant Professor of Economics, Asian University of Bangladesh, Ashulia, Savar, Dhaka-1341.
Abstract
Public investments in transport infrastructure have been widely used by policymakers as a tool to promote economic development. Transport infrastructure investment acts as a catalyst for productivity and economic growth. This study attempted to investigate the direction of causality between transport and economic growth in Bangladesh over 22 years, from 1999 to 2021. The coefficients of parameters in a simultaneous equation model are found via multivariate analysis and the three-stage least squares method. According to the estimated conclusion, GDP drives transport expansion and transport development considerably contributes to economic growth, which is ten times GDP. But compared to the transport elasticity of growth, the output elasticity of transport is lower. Additionally, this paper also shows that transport significantly enhances exports, marketing of agricultural goods, and industrial production.
Keywords: Transport, Economic Growth, Three Stage Least Square, Multivariate analysis.