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

Authors

Gazi Mainul Hassan, University of Waikato, University of Western Sydney
Shamim Shakur, Massey University
Mohammed Bhuyan, University of WollongongFollow

RIS ID

97096

Publication Details

Hassan, G. Mainul., Shakur, S. & Bhuyan, M. (2012). Nonlinear growth effect of remittances in recipient countries: an econometric analysis of remittances-growth nexus in Bangladesh. Annual NZAE Conference (pp. 1-35). New Zealand Association of Economists.

Link to publisher version (URL)

NZAE Conference

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.