Remittances and Economic Growth: Empirical Evidence from Bangladesh India and Sri Lanka

Abstract

Many developing countries are increasingly dependent upon the remittances received from migrant workers to boost up their foreign reserves. This study is examines the relationship between remittances and economic growth in Bangladesh, India and Sri Lanka. Findings revealed that in Bangladesh, growth in remittances had a positive effect on economic growth, while in India such a relationship was not seen. Sri Lanka showed a two way directional causality, where economic growth influences growth in remittances and vice versa. The paper also discusses several policy issues on remittances in relation to financial institutions, savings and investment, regulatory framework and gender.