Workers’ Remittances and Economic Growth in South Asia
AbstractThis study investigates the effect of workers’ remittances on economic growth of five South Asian countries namely Pakistan, India, Bangladesh, Sri Lanka & Nepal by employing long time series data from 1975 to 2009. Cointegration results confirm that there exist significant positive long run relationship between remittances and economic growth in India, Bangladesh, Sri Lanka and Nepal while, significant negative relationship exist between remittances and economic growth in Pakistan. Causality analysis shows bidirectional causality between remittances and economic growth in Nepal and Sri Lanka. On the other hand, unidirectional causality exist, runs from remittances to economic growth in Pakistan, India and Bangladesh. Sensitivity analysis confirms that the results are robust. It suggested that policy makers should make policies to reduce the transaction cost to welcome remittances in the region. In addition, countries especially Pakistan should more relying on increasing exports rather than workers’ remittances as foreign exchange earnings for sustainable and long run growth in the country.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39001.
Date of creation: 2012
Date of revision:
Remittances; Economic Growth;
Find related papers by JEL classification:
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- F24 - International Economics - - International Factor Movements and International Business - - - Remittances
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-05 (All new papers)
- NEP-CWA-2012-06-05 (Central & Western Asia)
- NEP-FDG-2012-06-05 (Financial Development & Growth)
- NEP-MIG-2012-06-05 (Economics of Human Migration)
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