Impacts of Remittance and FDI on Economic Growth in South Asian Countries: A Panel Data Analysis
Author (s)
Md. Golam Mostafa & Md. Abdul Wadud
Abstract
The current study looks at the short- and long-term effects of foreign direct investment (FDI) and remittances on gross domestic product (GDP) in South Asian nations, particularly Bangladesh, India, Sri Lanka, and Pakistan. Utilizing annual panel data from several secondary sources spanning the period from 1981 to 2023, the research applies multiple econometric techniques, including LLC and IPS tests, Johansen Fisher type cointegration test, and panel Vector Error Correction Model (VECM), along with several diagnostic tests to ensure model reliability. The findings reveal a substantial long-term relation between the variables. Remittances and total reserves have a notable optimistic impact on GDP in both the long and short term, while FDI negatively impacts GDP. To enhance remittance flow and promote sustainable economic growth, the study suggests exporting a skilled labor force abroad. Consequently, the study recommends that South Asian countries develop policies, programs, and institutional reforms to encourage the productive use of remittances.
Keywords: Economic growth, Foreign direct investment, Remittance VECM, LLC, IPS.
| Title: | Impacts of Remittance and FDI on Economic Growth in South Asian Countries: A Panel Data Analysis |
|---|---|
| Author: | Md. Golam Mostafa & Md. Abdul Wadud |
| Journal Name: | International Journal of Science and Business |
| Website: | ijsab.com |
| ISSN: | ISSN 2520-4750 (Online), ISSN 2521-3040 (Print) |
| DOI: | https://doi.org/10.58970/IJSB.2446 |
| Media: | Online |
| Volume: | 40 |
| Issue: | 1 |
| Issue publication (Year): | 2024 |
| Acceptance Date: | 15/08/2024 |
| Date of Publication: | 19/08/2024 |
| PDF URL: | https://ijsab.com/wp-content/uploads/2446.pdf |
| Free download: | Available |
| Page: | 92-106 |
| First Page: | 92 |
| Last Page: | 106 |
| Paper Type: | Research paper |
| Current Status: | Published |
Cite This Article:
Mostafa, M. G. & Wadud, M. A. (2024). Impacts of Remittance and FDI on Economic Growth in South Asian Countries: A Panel Data Analysis, International Journal of Science and Business, 40(1), 92-106. DOI: https://doi.org/10.58970/IJSB.2446
Retrieved from https://ijsab.com/wp-content/uploads/2446.pdf
About Author (s)
Md. Golam Mostafa (Corresponding Author), Associate Professor (Economics), Officer on Special Duty, Directorate of Secondary and Higher Education, Dhaka, Bangladesh, & Ph.D. Fellow, Department of Economics, University of Rajshahi, Rajshahi-6205, Bangladesh. ORCID: https://orcid.org/0009-0001-9811-6241
Md. Abdul Wadud, Professor, Department of Economics, University of Rajshahi, Rajshahi -6205, Bangladesh.
DOI: https://doi.org/10.58970/IJSB.2446