Bangladesh began implementing a series of trade liberalization reforms in the early 1990s in an attempt to arrest a burgeoning trade deficit, but with little effect. This may be due to trade policies based on aggregate data that ignore the individual responses of Bangladesh's main trading partners. This study estimates the bilateral price and income export and import elasticities for Bangladesh's five major trading partners. The findings indicate that the bilateral elasticity estimates not only vary in magnitude among the countries, but also differ markedly from aggregate elasticity values estimated in previous studies. This suggests that policies should he tailored to trading partners to deliver the intended outcomes.

Foreign direct investment in Sri Lanka has grown immensely since the initiation of economic reforms in 1977. Further escalations in FDI inflows are considered an integral component of the current Sri Lankan Government's intentions to foster economic growth. This paper examines the long-run effects on Sri Lanka's FDI inflows from changes in key macroeconomic variables of interest. Findings indicate that, of the five variables considered, the wage rate is the most important determinant of inbound FDI to Sri Lanka. However, other major economic indicators such as GDP, exchange rates, interest rates, and the level of external trade should also be given due consideration in policies designed to attract FDI inflows.

Taxation policy has been recognized as a main determinant of foreign direct investment (FDI). However, the effect of taxation policy on other key macro-economic variables of interest has received little attention in the literature. This paper seeks to establish the long-run effects of a change in the Australian company tax rate on inbound FDI and other Australian macro-economic variables using vector autoregression (VAR) analysis to account for the interrelatedness of the variables under consideration. Results indicate that FDI, real gross domestic product (GDP) and trade with the rest of the world are all responsive to a change in the company tax rate.