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Exploring the nexus between remittances and economic growth: a study of Bangladesh

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  • Ronald Kumar
  • Peter Stauvermann

Abstract

In this article, we explore the much debated nexus between remittances and economic growth in Bangladesh. Drawing on an annual data from 1979 to 2012 and using the augmented Solow framework with the autoregressive distributed lag bounds procedure, we examine the cointegration relationship, the short-run and long-run effects and the causality nexus between remittances per worker, capital per worker and the output per worker. The results show that remittances have a mixed effect in the short-run, however, a momentous positive effect in the long-run (0.11 %), on the output per worker. From the Granger causality assessment, we find inter alia, a bidirectional causality between remittances and output (in per worker terms) and a unidirectional causation from capital to remittances (in per worker terms). Our results therefore support remittance led growth hypothesis in Bangladesh. Copyright Springer-Verlag Berlin Heidelberg 2014

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  • Ronald Kumar & Peter Stauvermann, 2014. "Exploring the nexus between remittances and economic growth: a study of Bangladesh," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(4), pages 399-415, December.
    • Handle: RePEc:spr:inrvec:v:61:y:2014:i:4:p:399-415
    DOI: 10.1007/s12232-014-0199-3
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    10. Traverso, Silvio, 2016. "How to escape from a poverty trap: The case of Bangladesh," World Development Perspectives, Elsevier, vol. 4(C), pages 48-59.
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    12. Anupam Das & Murshed Chowdhury, 2019. "Macroeconomic impacts of remittances in Bangladesh: The role of reverse flows," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 48(3), November.
    13. Anupam Das & Adian McFarlane, 2020. "Remittances and disaggregated energy consumption in Bangladesh," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 67(2), pages 251-268, June.
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    15. Huseyin KARAMELIKLI & Yılmaz BAYAR, 2015. "REMITTANCES AND ECONOMIC GROWTH IN TURKEY Abstract : Savings are one of the important determinants beyond the theories of economic growth. Therefore remittances and foreign direct investment inflows h," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 4(2), pages 1-2, july.
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    18. Imtiaz Arif Lubna Khan Syed Ali Raza, 2018. "External Resources and Economic Growth: An Empirical Analysis of South Asian Countries," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 21(2), pages 1-17, November.
    19. Canh P Nguyen, 2023. "Last chance to travel or safety first? The influence of exposure to natural hazards and coping capacities on tourism consumption," Tourism Economics, , vol. 29(4), pages 952-985, June.
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    21. Nahed Zghidi & Imen Mohamed Sghaier & Zouheir Abida, 2018. "Remittances, Institutions, and Economic Growth in North African Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 804-821, September.

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    More about this item

    Keywords

    Remittances; ARDL approach; Granger causality; Bangladesh; C22; F24; F43; O53;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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