Analysing how internet use, electricity consumption, trade openness, and governance influence Bangladesh’s economic growth

Abstract Bangladesh’s rapid economic transformation over the past three decades has been shaped by structural reforms, digital advancements, energy infrastructure expansion, and trade liberalisation. However, sustaining inclusive growth requires a deeper understanding of how these drivers, particularly internet usage, electricity usage, trade openness, and institutional quality, influence economic performance. This study, therefore, investigates the dynamic relationships among these variables and economic growth in Bangladesh. Utilising both the ARDL bounds testing approach and VECM, the analysis explores both short-run and long-run interactions, along with Granger causality and stability diagnostics. The empirical results reveal that electricity consumption has a strong and statistically significant positive effect on economic growth in both the short and long run, confirming the energy-led growth hypothesis. Control of corruption also exerts a long-run positive impact, suggesting institutional quality is critical for sustainable development. While trade openness negatively affects growth in the long term, likely due to structural trade imbalances, it demonstrates a strong short-term influence on the GDP. Internet usage, though theoretically important, shows no statistically significant long-run impact, potentially reflecting infrastructural gaps or delayed adoption effects. Strengthening digital and energy infrastructure, improving governance, and addressing structural weaknesses in trade policy are essential for promoting sustained economic growth.