Do remittances and foreign aid augment the gross savings: Bangladesh, India and Philippines perspective?

International Review of Economics - Tập 65 - Trang 449-463 - 2018
Shirin Akter1,2
1Department of Economics, Graduate School of Modern Society and Culture, Niigata University, Niigata, Japan
2Human Resources Department, Bangladesh Bank, Head Office, Dhaka, Bangladesh

Tóm tắt

Savings is considered to be a principal determinant to achieve long-run economic growth. Remittances and foreign aid are two important foreign capital inflows to meet the savings deficiency of developing nations. The objective of this study is to investigate the long-run impact of remittance to stimulate savings in remittance recipient countries. This paper contributes to the macroeconomic impact of remittance through a comparative study on Bangladesh, India and Philippines that positioned among the top ten largest remittance recipient countries from 2008 and onwards. The analysis makes use of an annual time series data over the period of 1980–2015. The Johansen cointegration test suggested long-run cointegrating relationship of remittance and foreign aid on gross savings. The test result suggests positive effect of remittances on gross savings for Bangladesh and Philippines although an insignificant negative effect for India. However, foreign aid has significant negative long-run impact in all the three cases. Government policy should focus on leveraging remittance flows to facilitate savings and investment for capital accumulation.

Tài liệu tham khảo

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