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Determination of Causality between Remittance and Import: Evidence from Bangladesh

Author

Listed:
  • 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)

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.

Suggested Citation

  • Dewan Muktadir-Al-Mukit & A. Z. M. Shafiullah & Anamul Haque Sajib, 2013. "Determination of Causality between Remittance and Import: Evidence from Bangladesh," International Journal of Business and Social Research, LAR Center Press, vol. 3(3), pages 55-62, March.
    • Handle: RePEc:lrc:larijb:v:3:y:2013:i:3:p:55-62
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    References listed on IDEAS

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    1. Andrés Solimano, 2003. "Remittances by Emigrants: Issues and Evidence," WIDER Working Paper Series DP2003-89, World Institute for Development Economic Research (UNU-WIDER).
    2. Solimano, Andrés, 2003. "Remittances by emigrants: issues and evidence," Macroeconomía del Desarrollo 5390, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. John Connell & Dennis Conway, 2000. "Migration and remittances in island microstates: a comparative perspective on the South Pacific and the Caribbean," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 24(1), pages 52-78, March.
    4. Richard H. Adams, 2006. "International Remittances and the Household: Analysis and Review of Global Evidence," Journal of African Economies, Centre for the Study of African Economies, vol. 15(2), pages 396-425, December.
    5. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    6. Granger, Clive W J, 1986. "Developments in the Study of Cointegrated Economic Variables," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 213-228, August.
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    Citations

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    Cited by:

    1. Khan, Adnan, 2020. "A Bibliography Search on International Migration and Remittances Literature during the period of 1971-2020: A Case of Bangladesh," MPRA Paper 108143, University Library of Munich, Germany, revised 2020.
    2. Bezon Kumar, 2019. "The Impact of International Remittances on Poverty Alleviation in Bangladesh," Remittances Review, Remittances Review, vol. 4(1), pages 67-86, May.
    3. Sena Kimm Gnangnon, 2019. "Remittances Inflows and Trade Policy," Remittances Review, Remittances Review, vol. 4(2), pages 117-142, October.
    4. Ayse Ari, 2022. "Remittances and Energy Consumption: APanel Data Analysis for MENA Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 120-125.
    5. Khan, Adnan & Mrs, Sultana, 2021. "International Remittances Literature: A Study in Bangladesh during the period of 1971-2020," MPRA Paper 108290, University Library of Munich, Germany, revised 2021.
    6. Tuck Cheong Tang, 2018. "Financial Sector and Aggregate Import Demand: A General Equilibrium Perspective with Japan Data," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 14(2), pages 45-64.

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