Mohammad Masudur Rahman

Trade in financial services in developing countries: a case of the Bangladesh financial sector

Purpose – The purpose of this paper is to investigate the opportunities and challenging prospects for liberalizing financial services in various ways under the General Agreement on Trade in Services (GATS), in view of Bangladeshs interests and concerns.Design/methodology/approach – Different tabular and graphical approaches and critical investigation are conducted to analyze the impact of financial liberalization to explore challenges and opportunities of liberalizing financial sector under GATS framework.Findings – This paper finds that although Bangladesh does not make any commitment under GATS, the rate of liberalization in the financial sector has been quite rapid. As one of the least developed countries (LDCs), Bangladesh should have the flexibility to make commitments as well. From the present status of financial sector liberalization, this paper recommends that Bangladesh should adopt commitments because any non‐commitment sends the wrong signal to the global market and may reduce foreign direct i...

Economic impact of the proposed Bangladesh–India FTA: potentials and realities

Purpose – The purpose of this paper is to investigate the potential economic effects of the proposed Bangladesh-India free trade agreement (FTA). Design/methodology/approach – The authors have used the computable general equilibrium (CGE) analysis of Global Trade Analysis Project (GTAP) database. The analysis highlights the possible costs and benefits of the two nations within three different scenarios. Under Scenario I all bilateral import tariffs between Bangladesh and India are removed; Scenario II represents the setting where Bangladesh cuts its all tariffs by 75 and in Scenario III Bangladesh cuts tariffs by 50 percent. India cuts all their tariffs by 100 percent in all three scenarios. Findings – The findings indicate that India may gain more in terms of welfare and real GDP via the improved terms of trade while Bangladesh is going to have welfare loss, but if Bangladesh is able to make a preferential FTA like Scenario III with India its welfare, real GDP and exports will be increased substantially....

Trade and investment potential among BCIM countries: prospects for a dynamic growth quadrangle

Purpose – The purpose of this paper is to explore the trade and investment potential under the ambit of sub‐regional cooperation comprising the four contiguous countries of Bangladesh, China, India and Myanmar (BCIM).Design/methodology/approach – The study addressed both intra‐regional and intra‐industrial trade, applying a dynamic gravity model of bilateral trade flows by product group of BECs 1‐digit product classification, to set a panel data for the period of 1992‐2009.Findings – The analysis reveals that higher trade transaction costs and tariff between each pair of countries reduce the trade flow. One of the major findings of the paper is that a large part of BCIMs trade has remained unrealized and the trade transaction cost is one of the major trading barriers prohibiting the growth of BCIM intra‐regional trade. The paper concludes that liberalization of non‐policy barriers will spur BCIMs trade, particularly in a time of ongoing global economic and financial crisis.Practical implications – The ...

JUMP, NON-NORMAL ERROR DISTRIBUTION AND STOCK PRICE VOLATILITY — A NONPARAMETRIC SPECIFICATION TEST

This paper examines a wide variety of popular volatility models for stock index return, including Random Walk model, Autoregressive model, Generalized Autoregressive Conditional Heteroscedasticity (GARCH) model, and extensive GARCH model, GARCH-jump model with Normal, and Student t-distribution assumption as well as nonparametric specification test of these models. We fit these models to Dhaka stock return index from 20 November 1999 to 9 October 2004. There has been empirical evidence of volatility clustering, alike to findings in previous studies. Each market contains different GARCH models, which fit well. From the estimation, we find that the volatility of the return and the jump probability were significantly higher after 27 November 2001. The model introducing GARCH jump effect with normal and Student t-distribution assumption can better fit the volatility characteristics. We find that RW-GARCH-t, RW-AGARCH-t RW-IGARCH-t and RW-GARCH-M-t can pass the nonparametric specification test at 5% significance level. It is suggested that these four models can capture the main characteristics of Dhaka stock return index.