Foreign Policy Uncertainty and Export Dynamics: Insights from a Developing Economy
摘要
This study investigates the impact of trading partners’ economic policy uncertainty (EPU) on Bangladesh’s exports. Using monthly bilateral data for 17 major partners from 2001 to 2020 and a newspaper-based EPU index, we estimate linear and nonlinear panel ARDL models with common correlated effects. Results indicate a positive long-run effect of foreign EPU on exports, reflecting Bangladesh’s competitiveness in low-cost consumer goods. The relationship is asymmetric in the long run but insignificant in the short run. Causality tests confirm bidirectional linkages between exports and EPU. Findings underscore the importance of monitoring global policy uncertainty to sustain export resilience and growth.