Determination of Causality between Remittance and Import: Evidence from Bangladesh

Dewan Muktadir-Al-Mukit, A. Z. M. Shafiullah, Anamul Haque Sajib

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.

Keywords


Remittance; Import; Bangladesh;Cointegration; Granger Causality

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DOI: http://dx.doi.org/10.18533/ijbsr.v3i3.56

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International journal of business and social research (Print)
ISSN 2164-2540

International journal of business and social research (Online)
ISSN 2164-2559

[International Journal of Business and Social Research (IJBSR) previously published by MIR Center for Socio-Economic Research, MD, USA. From February 2018 this journal is published by the LAR Center Press, OR, USA]