Remittances and Economic Growth: Empirical Evidence from Bangladesh India and Sri Lanka
AbstractIn many developing countries, remittance payments from migrant workers are increasingly becoming a significant source of export income. This paper investigates the causal link between remittances and economic growth in three countries, Bangladesh, India and Sri Lanka, by employing the Granger causality test under a VAR framework (Granger 1988). Using time series data over a 25 year period, we found that growth in remittances does lead to economic growth in Bangladesh. In India, there seems to be no causal relationship between growth in remittances and economic growth; but in Sri Lanka, a two-way directional causality is found; namely economic growth influences growth in remittences and vice-versa. The paper also discusses a number of policy issues arising from the results of the analysis in relation to remittances in association with liberalisation of financial institutions, gender issues, regulation and enforcement, investment and savings schemes, and promotion and education.
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Bibliographic InfoPaper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number 10-27.
Length: 26 pages
Date of creation: 2010
Date of revision:
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- Gyan Pradhan & Mukti Upadhyay & Kamal Upadhyaya, 2008. "Remittances and economic growth in developing countries," European Journal of Development Research, Taylor and Francis Journals, vol. 20(3), pages 497-506.
- Kanchan Datta & Bimal Sarkar, 2014. "Relationship between Remittances and Economic Growth in Bangladesh: An Econometric Study," Bangladesh Development Research Working Paper Series (BDRWPS) BDRWPS No. 19, Bangladesh Development Research Center (BDRC).
- Jawaid, Syed Tehseen & Raza, Syed Ali, 2012.
"Workers’ remittances and economic growth in China and Korea: an empirical analysis,"
39003, University Library of Munich, Germany.
- Syed Tehseen Jawaid & Syed Ali Raza, 2012. "Workers' remittances and economic growth in China and Korea: an empirical analysis," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 5(3), pages 185-193, December.
- Gazi Mainul Hassan & Mohammed S. Bhuyan, 2013. "Growth Effects of Remittances:Is there a U-Shaped Relationship?," Working Papers in Economics 13/16, University of Waikato, Department of Economics.
- Jawaid, Syed Tehseen & Raza, Syed Ali, 2012. "Workers’ Remittances and Economic Growth in South Asia," MPRA Paper 39001, University Library of Munich, Germany.
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