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Relationship between Remittance and Economic Growth: Evidence from Bangladesh

Author

Listed:
  • Sarkar, Md. Sujahangir Kabir

    (Associate Professor, Department of Economics and Sociology, Patuakhali Science and Technology University, Patuakhali, BANGLADESH)

  • Rahman, Md. Zillur

    (Associate Professor, Department of Language and Communication, Patuakhali Science and Technology University, Patuakhali, BANGLADESH)

  • Islam, Mohammad Muzahidul

    (Associate Professor, Department of Management Studies, Patuakhali Science and Technology University, Patuakhali, BANGLADESH)

  • Sikdar, Md. Mehedi Hasan

    (Associate Professor, Department of Statistics, Patuakhali Science and Technology University, Patuakhali, BANGLADESH)

  • Khan, Abul Basher

    (Associate Professor, Department of Economics and Sociology, Patuakhali Science and Technology University, Patuakhali, BANGLADESH)

Abstract

Remittance is one of the significant sources of capital, especially for developing countries like Bangladesh. This study explores the relationship between remittance and economic growth in Bangladesh. Time series data from 1995-2016 extracted from the World Bank database and Bangladesh Bank statistics were used to measure the relationship of remittance and gross domestic product (GDP) with other variables such as gross capital formation, gross domestic saving, and household final consumption expenditure. Pearson’s correlation coefficient is estimated between the variables. Moreover, the annual growth (%) of remittance earnings by Bangladesh has been calculated and compared with the GDP growth of Bangladesh. The study has found that, on average, the remittance of Bangladesh has increased by 10.85% from 1995-2016, which is higher than the average growth of the country’s GDP. It has been revealed that there is a positive relationship between remittance with the GDP, gross capital formation, domestic saving, and household final consumption expenditure in the case of Bangladesh. However, there has been a frequent fluctuation of remittance flow in Bangladesh in recent years. Thus, this study recommends that Bangladesh take proper initiatives to maintain an increasing trend of remittance in the coming years, which would be helpful for the socio-economic development of the country.

Suggested Citation

  • Sarkar, Md. Sujahangir Kabir & Rahman, Md. Zillur & Islam, Mohammad Muzahidul & Sikdar, Md. Mehedi Hasan & Khan, Abul Basher, 2018. "Relationship between Remittance and Economic Growth: Evidence from Bangladesh," American Journal of Trade and Policy, Asian Business Consortium, vol. 5(3), pages 93-98.
    • Handle: RePEc:ris:ajotap:0053
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    Cited by:

    1. Khan, Adnan, 2020. "A Bibliography Search on International Migration and Remittances Literature during the period of 1971-2020: A Case of Bangladesh," MPRA Paper 108143, University Library of Munich, Germany, revised 2020.
    2. Khan, Adnan & Mrs, Sultana, 2021. "International Remittances Literature: A Study in Bangladesh during the period of 1971-2020," MPRA Paper 108290, University Library of Munich, Germany, revised 2021.

    More about this item

    Keywords

    Remittance; Economic Growth; Bangladesh;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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