Impact of Sectoral Growth on the Economic Development of Bangladesh: An Experimental Study

Abstract

The study investigates the impact of sectoral growth on the economic development of Bangladesh. It has been accomplished from the viewpoint of financial intermediaries as well as real estate, renting and business activities sectors. The secondary data, for the period fiscal year (FY) 1995-1996 to the fiscal year (FY) 2018-2019, has been used to perform the analysis. The dependent variable in this study is the gross domestic product (GDP) representing the development status of the economy of Bangladesh. The independent variables- monetary intermediation (banks) sector (MIS), insurance sector (IS), other financial auxiliaries sector (FAS), real estate, renting and business activity sector (RBS) - have been used to show the relationship with GDP. A Multiple regression analysis has been used to develop the relationship. Besides, the coefficient of determination shows 70.2 % of the variance in GDP can be predicted from the independent variables. If other independent variables are incorporated in the model, 63.6% of the variation in the dependent variable (GDP) can be explained by the independent variables, which is observed by adjusted R-square value. In the analysis, it has been found a considerable effect of monetary intermediation (banks) sector (MIS), insurance sector (IS), other financial auxiliaries sector (FAS), real estate renting and business activity sector (RBS) on GDP of Bangladesh. Finally, application of the outcome of this study will be effective only to the economy of Bangladesh.

Keywords: GDP, Monetary Intermediation, Correlation, Regression, Financial Auxiliaries sector (FAS), Analysis of Variance (ANOVA).

DOI: 10.7176/RJFA/11-14-09

Publication date:July 31^st 2020