Determination of Causality between Remittance and Import: Evidence from Bangladesh

Authors

  • Dewan Muktadir-Al-Mukit Lecturer, Faculty of Business Administration Eastern University, Dhaka, Bangladesh
  • A. Z. M. Shafiullah Assistant Professor Department of Statistics, Biostatistics and Informatics University of Dhaka, Dhaka, Bangladesh
  • Anamul Haque Sajib Lecturer Department of Statistics, Biostatistics and Informatics University of Dhaka, Dhaka, Bangladesh

DOI:

https://doi.org/10.18533/ijbsr.v3i3.56

Keywords:

Remittance, Import, Bangladesh, Cointegration, Granger Causality

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.

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Issue

Vol. 3 No. 3 (2013): March

Section

Article

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