Economic Relations between Bangladesh and Spain: An Empirical Analysis of Trade, Demographics, and Sectoral Growth (2000-2025)

Arizmendi, Luis-Felipe (2026): Economic Relations between Bangladesh and Spain: An Empirical Analysis of Trade, Demographics, and Sectoral Growth (2000-2025).

Abstract

This study evaluates the bilateral economic corridor between Bangladesh and Spain (2000–2025). Using an augmented gravity model with HAC standard errors, results reveal that Bangladesh’s export volume is highly elastic with respect to domestic GDP growth (β = 2.20) and decoupled from Spanish business cycles. Structural break analysis shows that post-2013 compliance reforms increased buyer trust, although growth elasticity is maturing. Building on evidence from sustainable finance, the paper argues that after Bangladesh’s LDC graduation in 2029, high-transparency ESG lending will be essential to meet EU requirements. The strategic recommendations, therefore, emphasize industrial upgrading and export diversification to sustain this important economic partnership.

• Item Type: MPRA Paper
• Language: English
• Keywords: Bilateral trade, Augmented gravity model, LDC graduation, ESG compliance, Sustainable lending, Spain-Bangladesh relations.
• Subjects: F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration

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