Nexus between Foreign Remittance and Economic Growth in Bangladesh

Abstract

Objective: The aim of this study review the current literature for determining the nexus between foreign remittance and economic growth in Bangladesh. Foreign remittance plays a pivotal role for economic growth in developing countries. It has taken a considerable attention to promote economic development compared to others sources of capital inflows such as aids, loans and foreign direct investments due to direct impact on socio-economic acceleration in a country. As a developing country, Bangladesh is one of the top 10 remittance-recipient countries in the world. Recently, the trends of remittance inflow are shrinking due to geopolitics and Middle East crisis. Methodology: Previous studies were reviewed, made literature matrix for findings literature and methodological gaps. Results: The evidences in the literature reveal that the nexus between foreign remittance and economic growth is inclusive and ambiguous for direct or indirect transmission channels through the inclusion of other variables in the analysis as financial development, investment, trade, consumption and poverty alleviation. Implications: Therefore, remittances inflow not only enhances economic growth and development but also reduces poverty in the labor exporting country.