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Remittances, Development Level, and Long-Run Economic Growth
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Economies 2017, 5(3), 25; doi:10.3390/economies5030025

Nonlinear Effects of Remittances on Per Capita GDP Growth in Bangladesh

1
Waikato Management School, University of Waikato, Hamilton 3240, New Zealand
2
School of Economics and Finance, Massey University, Palmerston North 4442, New Zealand
*
Author to whom correspondence should be addressed.
Academic Editor: Jacques Poot
Received: 20 July 2016 / Revised: 29 June 2017 / Accepted: 8 July 2017 / Published: 17 July 2017
(This article belongs to the Special Issue Long-Run Economic Impacts of International Migration)
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Abstract

This paper examines the impact of inward remittances flows on per capita gross domestic product (GDP) growth in Bangladesh during 1976–2012. We find that the growth effect of remittances is negative at first but becomes positive at a later stage, evidence of a non-linear relationship. Unproductive use of remittances was rampant in the beginning when they were received by migrant families, but better social and economic investments led to more productive utilization of remittances receipts at later periods. This suggests a U-shaped relationship between remittances and per capita GDP growth. Unlike what is suggested in the literature, that the effect of remittances is more pronounced in a less financially developed economy, our evidence does not show that the effect of remittances on per capita GDP growth in Bangladesh is conditional on the level of financial development. View Full-Text
Keywords: remittances; economic growth; Bangladesh; remittances utilization remittances; economic growth; Bangladesh; remittances utilization
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MDPI and ACS Style

Hassan, G.M.; Shakur, S. Nonlinear Effects of Remittances on Per Capita GDP Growth in Bangladesh. Economies 2017, 5, 25.

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