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Remittances flow and financial development in Bangladesh

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  • Chowdhury, Mamta B.

Abstract

Workers' remittance is a major source of foreign exchange earnings and plays an important role in the economy of Bangladesh. It accounts for 12% of GDP in 2010. This paper examines with annual data for 1971–2008, whether the flow of remittances is contributing positively to the development of the financial system of the country. Our results suggest that remittances have a significant positive effect on financial development. However, financial sector's development is neutral in its effect on the inflow of remittances.

Suggested Citation

  • Chowdhury, Mamta B., 2011. "Remittances flow and financial development in Bangladesh," Economic Modelling, Elsevier, vol. 28(6), pages 2600-2608.
    • Handle: RePEc:eee:ecmode:v:28:y:2011:i:6:p:2600-2608
    DOI: 10.1016/j.econmod.2011.07.013
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    More about this item

    Keywords

    Remittances; Financial development; Bangladesh; Cointegration; VECM; PcGETs; Endogeniety test;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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