What Drives Workers’ Remittances Flow of Bangladesh? A Dynamic Panel Data Analysis
Nobinkhor Kundu*
NHM. A. Azim**
Abstract: This paper develops a new approach to workers’ remittance modeling that captures the effects of macroeconomic determinants with the technical progress suggested by the exogenous growth model and explores how technical progress has affected the workers’ remittance flows into Bangladesh through formal channels. Workers’ remittances from migrants in the various host countries to Bangladesh will depend more on the macroeconomic conditions and technical progress in the world economy, as a migrant’s ability to send transfers remittance (World Bank, 2014b). This paper is empirically tested for Bangladesh’s manpower export with its 14 major service trading partner countries. A dynamic balanced panel data analysis has been used in order to capture these Unrestricted Error Correction Mechanism (UECM) and Generalized Method of Moments (GMM) estimator. The study estimates that the existence of cointegration, that is, stable long-run relationship from any short-run deviation, and short-run dynamics also show convergence. We find the coefficient of technical progress has positive (0.11) impacts on the workers’ remittance flows in Bangladesh, which is highly significant.
Keywords: Macroeconomic Determinants, Remittances, Technical Progress, Dynamic Panel Data
* Assistant Professor, Department of Economics, Comilla University, Comilla-3506, Bangladesh. E-mail: nobinkundu@yahoo.com
** Associate Professor, School of Business Studies, Southeast University, Dhaka-1213, Bangladesh. Email: nhmarif1@gmail.com