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Macroeconomic Factors Influencing Foreign Remittances: The Case of Bangladesh

Author

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  • Mohammad Bayezid Ali

    (Jagannath University)

Abstract

This paper examines the influence of few selected macroeconomic factors which are assumed to have influence on the flow of foreign remittances in Bangladesh. Yearly data between 1976 and 2011 have incorporated and a multivariate time series regression model have been designed to estimate the absolute relationship between remittances and macroeconomic determinants. It has found that professional and unskilled migrant have very low negative but significant regression coefficients but semi-skilled migrants have positive significant coefficient. Among other macroeconomic factors deposit interest rates and foreign exchange rates are also found to have statistically significant coefficients. Test of Granger causality reveals that foreign remittances have bi-directional causality with semi-skilled and un-skilled migrants and have uni-directional causality from professional migrants to remittances and remittances to DSE all share price index. However, extensive investigation is very essential to identify other macro economic factors that might cause the flow of foreign remittances in Bangladesh.

Suggested Citation

  • Mohammad Bayezid Ali, 2012. "Macroeconomic Factors Influencing Foreign Remittances: The Case of Bangladesh," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(3), pages 217-229, July.
    • Handle: RePEc:hur:ijaraf:v:2:y:2012:i:3:p:217-229
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    References listed on IDEAS

    as
    1. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 17, pages 1135-1198, Elsevier.
    2. Brown, Richard P. C., 1997. "Estimating remittance functions for Pacific Island Migrants," World Development, Elsevier, vol. 25(4), pages 613-626, January.
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    Cited by:

    1. Bezon Kumar & Md. Elias Hossain & Md. Ataul Gani Osmani, 2018. "Utilization of International Remittances in Bangladesh," Remittances Review, Remittances Review, vol. 3(1), pages 5-18, May.

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    More about this item

    Keywords

    Foreign Remittance; Migrant; Macroeconomic Determinants; Host Country; Granger Causality;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions

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