Exploring External Debt Sustainability and Economic Performance in Bangladesh with a Cointegration Approach

Exploring External Debt Sustainability and Economic Performance in Bangladesh with a Cointegration Approach | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Exploring External Debt Sustainability and Economic Performance in Bangladesh with a Cointegration Approach Aoulad Hosen This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8980330/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 12 You are reading this latest preprint version Abstract For developing countries, debt management tactics are appearing as a key challenge under particular fiscal constraints. This paper explores the long-run association between external debt servicing (EDS) and economic growth in Bangladesh using World Development Indicators (WDI) data from 1973 to 2020. Utilising Augmented Dickey-Fuller (ADF) unit root tests, Johansen cointegration analysis, and vector error correction modelling (VECM), the study demonstrates a statistically significant positive correlation (β = 0.125, SE = 0.029, p < 0.01), indicating that a 1% increase in EDS results in a 0.125% increase in GDP growth. These results suggest that proficient EDS management can facilitate enduring economic growth which also aligns with the concepts and goals of sustainability in Bangladesh. The consequences of the study and internal debt allocation in Bangladesh postulate empirical evidence for policymakers in developing economies, highlighting the importance of the strategic and productive use of external debt to support long-term growth. JEL Classification: E01, E63, F43, E62, H63 GDP Growth External Debt Services Debt Financing and Debt Overhang Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Under Review Version 1 posted Editorial decision: Revision requested 28 Apr, 2026 Reviews received at journal 18 Apr, 2026 Reviewers agreed at journal 12 Apr, 2026 Reviews received at journal 07 Apr, 2026 Reviewers agreed at journal 27 Mar, 2026 Reviewers agreed at journal 25 Mar, 2026 Reviewers agreed at journal 25 Mar, 2026 Reviewers invited by journal 25 Mar, 2026 Editor assigned by journal 25 Mar, 2026 Editor invited by journal 19 Mar, 2026 Submission checks completed at journal 17 Mar, 2026 First submitted to journal 17 Mar, 2026 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8980330","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":612185584,"identity":"3f8756ff-bed1-4530-9ff8-3dbaeb2f3a97","order_by":0,"name":"Aoulad Hosen","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA4UlEQVRIiWNgGAWjYHACxgMMbAwJYOYHiAgbAw8BPXAtjDNI1sLMQ4wW/vYegwM/yhjy+PkPH3tsu+MwUOQA24M3eLRInDljcLDnHEOx5Iy0dOPcM4eBIgnshnPwuepGjsEB3jaGxA03eMykc9sOA0UY2KTxOUweqOXgX5CW8+e/SVsCtcgT0mIA1HIYbMuBHDZpRqAWA0JaDM8cKzgsc04iceaMNDPJ3rZ0HsMzie14/SJ3vHnjwzdlNon9/IefSfxss5aTO374GN4QgwIJOAvoJMYGwhpGwSgYBaNgFOAFAHxeTS+6P8zjAAAAAElFTkSuQmCC","orcid":"","institution":"Bangladesh National University","correspondingAuthor":true,"prefix":"","firstName":"Aoulad","middleName":"","lastName":"Hosen","suffix":""}],"badges":[],"createdAt":"2026-02-26 17:23:13","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8980330/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8980330/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":105566742,"identity":"8d80bd17-593d-4050-b4d7-a64ab458ef70","added_by":"auto","created_at":"2026-03-27 12:57:11","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":535842,"visible":true,"origin":"","legend":"","description":"","filename":"AnonymisedGDPEDS7NDS.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8980330/v1_covered_dd9e5540-e453-4440-922f-c6ea9a00dd54.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Exploring External Debt Sustainability and Economic Performance in Bangladesh with a Cointegration Approach","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"discover-sustainability","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"disu","sideBox":"Learn more about [Discover Sustainability](https://www.springer.com/43621)","snPcode":"","submissionUrl":"","title":"Discover Sustainability","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Discover Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true},"keywords":"GDP Growth, External Debt Services, Debt Financing, and Debt Overhang","lastPublishedDoi":"10.21203/rs.3.rs-8980330/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8980330/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eFor developing countries, debt management tactics are appearing as a key challenge under particular fiscal constraints. 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