IMPACT OF REMITTANCE FLOWS ON NATIONAL SAVINGS: THE ROLE OF GDP GROWTH, MIGRATION RATE, AND INFLATION IN SOUTH ASIAN COUNTRIES

Md. Nur Nabi, Masum Billah

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IMPACT OF REMITTANCE FLOWS ON NATIONAL SAVINGS: THE ROLE OF GDP GROWTH, MIGRATION RATE, AND INFLATION IN SOUTH ASIAN COUNTRIES

Md. Nur Nabi1, Masum Billah2

1 Professor, Department of Finance and Banking, Patuakhali Science and Technology University;

2 MBA, Department of Finance and Banking, Patuakhali Science and Technology University.

*Corresponding author: nurnabicu@gmail.com

A R T I C L E  I N F O

Article Type: Research

Received: 28 October. 2023.

Accepted: 2 January. 2024.

Published: 21 January. 2024.

 

 

 A B S T R A C T

This study investigates the relationship between remittance flows and national savings in five South Asian countries: Bangladesh, India, Pakistan, Sri Lanka, and Nepal. The analysis also examines the roles of GDP growth, migration rates, and inflation in influencing national savings. A panel dataset spanning 25 years (1999-2023) was analyzed using econometric models such as Pooled Ordinary Least Squares (POLS), Fixed Effects, and Random Effects, with robustness checks conducted to validate the results. Four hypotheses were tested to assess the significance of each independent variable on national savings. The findings revealed that remittance flows have a significant positive relationship with national savings, indicating that remittances contribute to increasing savings. However, GDP growth, migration rates, and inflation showed insignificant effects on national savings when controlling for country-specific factors. These results highlight the need for policies that maximize the productive use of remittances, such as savings and investment programs targeted at remittance-receiving households. The study concludes that while remittances have the potential to enhance savings, further policy interventions are necessary to unlock their full benefits. The study’s findings support policymakers in optimizing remittance utilization to support long-term economic stability in South Asia. Future research could explore sector-specific impacts of remittances and extend the analysis to other regions for comparative insights.
Keywords:

Remittance, national savings, inflation, migration, South Asian.

 

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