Workers’ remittances effect on economic growth: An empirical evidence from Bangladesh
Md. Shohel Rana, Tanvir Hasan Anik, Sagor Mohanto
This study attempts to provide an analytical answer to the crucial economic issue of whether the workers’ remittances contributed to economic growth in Bangladesh. This study also examines the macroeconomic determinants of workers’ remittances in Bangladesh. We used time series data (1990-2017) over the 28 year period. The diagnostic test of the stationary, co-integration and linear regression of the considered series is carried out three methods. One is ADF unit root test .By using this test in the help of Eviews, 10, we found that real GDP and worker remittances’ are stationary at level and first difference is taken at that time to give us better result. Then we have used the Johansen Co-integration Test, the test result is that all the variables are co-integrated each other in the long run. There is a long run relationship between the dependent and independent variables, especially in the RGDP and WR. Finally, we used the regression analysis. The result shows that real gross domestic product (RGDP), worker remittances (WR), foreign direct investment (FDI), official development assistant (ODA), inflation rates (INF) of Bangladesh have significant impact on RGDP and others independent variables are less significant because of the p value is not up to the mark as we expected. We found out that a positive and significant relationship among the WR, FDI, ODA, and RGDP, on contrast, INF, ED of Bangladesh negative relationship with WR inflow. The quantitative evidence shows that workers’ remittances appeared to be a crucial source of economic growth.