Nonlinear growth effect of remittances in recipient countries: an econometric analysis of remittances-growth nexus in Bangladesh

Gazi Hassan (), Shamim Shakur and Mohammed Bhuyan

MPRA Paper from University Library of Munich, Germany

Abstract: The macroeconomic impacts of remittances flows on developing economies are not well understood. The paper is an attempt to understand the impact of inward remittances flows on per capita GDP growth in Bangladesh during 1974-2006. We find that the growth effect of remittances is negative at first but becomes positive at a later stage- a strong evidence of a non-linear relationship. This could be due to unproductive use of remittances in the beginning followed by more productive utilisation. Remittances positively affect per capita GDP growth in Bangladesh when the complementarity between remittances and financial development is incorporated into the analysis.

Keywords: Remittances; Economic Growth; Bangladesh; IV-estimation; Remittances utilisation (search for similar items in EconPapers)
JEL-codes: F0 F24 O4 (search for similar items in EconPapers)
Date: 2012-04-01
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Citations: View citations in EconPapers (10)

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