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Determination of Causality between Remittance and Import: Evidence from Bangladesh

Dewan Muktadir-Al-Mukit, A. Z. M. Shafiullah and Anamul Haque Sajib
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Dewan Muktadir-Al-Mukit: Lecturer, Faculty of Business Administration,Eastern University, Dhaka, Bangladesh
A. Z. M. Shafiullah: Assistant Professor,Department of Statistics, Biostatistics and Informatics,University of Dhaka, Dhaka, Bangladesh
Anamul Haque Sajib: Lecturer,Department of Statistics, Biostatistics and Informatics,University of Dhaka, Dhaka, Bangladesh

International Journal of Business and Social Research, 2013, vol. 3, issue 3, 55-62

Abstract: This study investigates the relationship between remittance and import for the economy of Bangladesh. The study used different econometric techniques of measuring the long and short term relationship between variables. The Johansen Cointegration test is used to determine the existence of a long term relationships between study variables. The normalized Cointegrating coefficients are found statistically significant and show a stable and positive relationship between study variables. Our Granger causality analysis suggests the existence of a unidirectional causality running from import to remittance. This confirms that remittances have no significant impact on the demand for imported goods rather import exerts a positive shock on the remittance of Bangladesh.

Keywords: Remittance; Import; Bangladesh; Cointegration; Granger Causality (search for similar items in EconPapers)
Date: 2013
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