An analysis of the trade relationship of Sri Lanka with Bangladesh after trade liberalization

Abstract

This study aims to examine the trade relationship of Sri Lanka with Bangladesh after trade liberalization enforced in Sri Lanka after year 1977 by using quantitative approach. The time series data collected for this study are ranging from 1980 to 2015. The primary tool used to analyze the collected is Gravity Regression Model. The dependent variable used in this research is the value of total bilateral trade between Sri Lanka and Bangladesh. The independent variables of the model are defined as PCGDPij, TRi/GDPi, TRij/GDPj, IFij, ERij, and SAFTA. The free trade system could be able to change Sri Lanka's regional trade after Sri Lanka's liberalization.