Human Resource Indicators and Bank Performance
An Empirical Study on Banking Industry, Bangladesh
Abstract
Accelerated globalization and the thirst for economic emancipation of the people create demographic shifts from developing countries to developed countries. To assist policymakers in effective decision making regarding labor migration and economic growth, our paper explores the hidden dynamics between labor migration and economic growth in Bangladesh from 1988 to 2020. The study was developed based on the Auto Regressive Distributed Lag (ARDL) framework to capture long-run and short-run dynamics among the variables. To find the directional relationship, we also perform the Toda Yamamoto Causality test to find the short-run impact on the dependent variables. The existence of co-integration among the variables is demonstrated by the Bounds test result. The empirical results show the long and short-run positive significant relationship between international labor migration and exchange rate. However, Inflation and GDP growth do not have any significant impact on migrant laborers from Bangladesh to abroad. The causality approach indicates a unidirectional causality between labor migration and exchange rate, GDP growth, and exchange rate. This paper suggests that the devaluation of the local currency would be a possible way to boost labor in Bangladesh.
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References
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Enders, W., & Lee, J. (2012). The flexible Fourier form and Dickey-Fuller type unit root tests. Economics Letters, 117(1), 196–199. https://doi.org/10.1016/j.econlet.2012.04.081
Engle, R. F., & Granger, C. W. J. (1987). Co-integration and error correction: Representation, estimation, and testing. Econometrica, 55(2), 251–276. https://doi.org/10.2307/1913236
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Keita, S. (2016). Bilateral real exchange rates and migration. Applied Economics, 48(31), 2937–2951. https://doi.org/10.1080/00036846.2015.1133893
Kelley, A. C. (1965). International Migration and Economic Growth: Australia, 1865-1935. The Journal of Economic History, 25(3), 333–354. https://doi.org/10.1017/S0022050700057351
Kepli, S., Bani, Y., Rosland, A., & Laila, N. (2021). Non-Performing Loans and Macroeconomic Variables in Malaysia: Recent Evidence. International Journal of Economics and Management, 15(1), 19–31.
Khan, M. K., Teng, J. Z., & Khan, M. I. (2019). The effect of migrant remittances on economic growth: An ARDL approach. Engineering Economics, 30(4), 434–441. https://doi.org/10.5755/j01.ee.30.4.21830
Majumder, C. (2016). Relationship between Remittance and Economic Growth in Bangladesh: an Autoregressive Distributed Lag Model (ARDL). European Researcher, 104(3), 156–167. https://doi.org/10.13187/er.2016.104.156
Matsubayashi, Y. (2005). Are US current account deficits unsustainable? Testing for the private and government intertemporal budget constraints. Japan and the World Economy, 17(2), 223–237. https://doi.org/10.1016/j.japwor.2003.12.011
McCoskey, S. K., & Selden, T. M. (1998). Health care expenditures and GDP: Panel data unit root test results. Journal of Health Economics, 17(3), 369–376. https://doi.org/10.1016/S0167-6296(97)00040-4
Morley, B. (2006). Causality between economic growth and immigration: An ARDL bounds testing approach. Economics Letters, 90(1), 72–76. https://doi.org/10.1016/j.econlet.2005.07.008
Muhammad Faheem, Azali Mohamed, Fatima Farooq, & Sajid Ali. (2029). Do Migrant Remittances Spur Financial Development in Pakistan?evidence From Linear and Nonlinear ARDL Approach. Review of Economics and Development Studies, 5(4), 869–880. https://doi.org/10.26710/reads.v5i4.905
ÖZTÜRK, S., & ÖZDİL, S. (2020). Investigation of The Relationship Between Migration, Unemployment and Growth in the OECD Countries with Panel ARDL Technique. Yönetim ve Ekonomi: Celal Bayar Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 27(1), 159–168. https://doi.org/10.18657/yonveek.490073
Paul, B., & Uddin, G. S. (2011). Remittances and output in Bangladesh : An ARDL bounds testing approach to cointegration Remittances and output in Bangladesh : an ARDL. June. https://doi.org/10.1007/s12232-011-0120-2
Pesaran, M. H., & Shin, Y. (1997). An Autoregressive Distributed-Lag Modelling Approach to Cointegration Analysis. Symposium at the Centennial of Ragnar Frisch, The Norwegian Academy of Science and Letters, 1–24. https://doi.org/10.1017/ccol0521633230.011
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616
Phillips, P. C. B., & Perron, P. (1988). Testing for a Unit Root in Time Series Regression. Biometrika, 75(2), 335–346. https://doi.org/10.2307/2336182
Salt, J. (1992). The future of international labor migration. International Migration Review, 26(4), 1077–1111. https://doi.org/10.2307/2546876
Saltelli, A. (2002). Sensitivity analysis for importance assessment. Risk Analysis, 22(3), 579–590. https://doi.org/10.1111/0272-4332.00040
Shin, A. J. (2021). Exchange rates and immigration policy. Comparative Migration Studies, 9(1), 1–16. https://doi.org/10.1186/s40878-021-00228-2
Siddique, A., Selvanathan, E. A., & Selvanathan, S. (2012). Remittances and Economic Growth: Empirical Evidence from Bangladesh, India and Sri Lanka. Journal of Development Studies, 48(8), 1045–1062. https://doi.org/10.1080/00220388.2012.663904
Tipayalai, K. (2020). Impact of international labor migration on regional economic growth in Thailand. Journal of Economic Structures, 9(1), 1–19. https://doi.org/10.1186/s40008-020-00192-7
Toda, H. Y., & Yamamotob, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66(1–2), 225–250. https://doi.org/https://doi.org/10.1016/0304-4076(94)01616-8
Wang, Y., & Carlos, J. (2022). The role of demographics and migration for the future of economic growth in China ✩. European Economic Review, 144(February), 104076. https://doi.org/10.1016/j.euroecorev.2022.104076
Aboulezz, N. (2015). Remittances and Economic Growth Nexus: Empirical Evidence from Kenya. International Journal of Academic Research in Business and Social Sciences, 5(12), 285–296. https://doi.org/10.6007/ijarbss/v5-i12/1958
Arango, J. (2000). Explaining migration: A critical view. In UNESCO (Vol. 52, Issue 165). https://doi.org/10.1111/1468-2451.00259
Asad, M., Haider Hashmi, S., & Yousaf, S. (2016). Nexus between workers’ remittances, unemployment, labor migration and economic growth in Pakistan. International Journal of Organizational Leadership, 5(4), 360–379. https://doi.org/10.33844/ijol.2016.60188
Attari, M. I. J., & Javed, A. Y. (2013). Inflation, Economic Growth and Government Expenditure of Pakistan: 1980-2010. Procedia Economics and Finance, 5(13), 58–67. https://doi.org/10.1016/s2212-5671(13)00010-5
Bahmani-Oskooee, M., & Chi Wing Ng, R. (2002). Long-Run Demand for Money in Hong Kong: An Application of the ARDL Model. International Journal of Business and Economics, 1(2), 147–155. http://www.ijbe.org/table of content/pdf/vol1-2/06.pdf
Bairagi, S., & Kamal, M. (2019). Is Bangladesh’s Economy Approaching the Lewis Turning Point ? South Asia Economic Journal, 20(1), 19–45. https://doi.org/10.1177/1391561418822208
Czaika, M. (2015). Migration and Economic Prospects. Http://Dx.Doi.Org/10.1080/1369183X.2014.924848, 41(1), 58–82. https://doi.org/10.1080/1369183X.2014.924848
Daoud, J. I. (2018). Multicollinearity and Regression Analysis. Journal of Physics: Conference Series, 949(1). https://doi.org/10.1088/1742-6596/949/1/012009
Datta, K. (2014). ) Relationship between Remittances and Economic Growth in Bangladesh: An Econometric Study. Bangladesh Development Research Center (BDRC), 19(January).
Dolado, J. J., & Lütkepohl, H. (1996). Making wald tests work for cointegrated VAR systems Making Wald Tests Work for Cointegrated VAR Systems. Econometric Reviews, 15(4), 369–386. https://doi.org/10.1080/07474939608800362
Enders, W., & Lee, J. (2012). The flexible Fourier form and Dickey-Fuller type unit root tests. Economics Letters, 117(1), 196–199. https://doi.org/10.1016/j.econlet.2012.04.081
Engle, R. F., & Granger, C. W. J. (1987). Co-integration and error correction: Representation, estimation, and testing. Econometrica, 55(2), 251–276. https://doi.org/10.2307/1913236
Eric Fosu, O.-A., & Magnus, F. J. (2006). Bounds Testing Approach to Cointegration: An Examination of Foreign Direct Investment Trade and Growth Relationships. American Journal of Applied Sciences, 3(11), 2079–2085. https://doi.org/10.3844/ajassp.2006.2079.2085
Gao, Y. (2015). The Impact of Exchange Rate Fluctuations on Labor Migration : Evidence from U . S . Nonimmigrant Visa Statistics.
Gregory, A. W., & Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime. Journal of Economometrics, 70(1), 99–126. https://doi.org/10.1111/j.1468-0084.1996.mp58003008.x
ICT Division Bangladesh. (2020). Post-COVID-19 ICT Roadmap: The Labour Migration and Remittance sector. https://ictd.portal.gov.bd/
Jawaid, S. T., & Raza, S. A. (2012). Workers’ remittances and economic growth in China and Korea: an empirical analysis. Journal of Chinese Economic and Foreign Trade Studies, 5(3), 185–193. https://doi.org/10.1108/jcefts.2008.36001caa.002
Johansen, Soren. (1992). DETERMINATION OF COINTEGRATION RANK IN THE PRESENCE OF A LINEAR TREND. OXFORD BULLETIN OF ECONOMICS AND STATISTICS, 54(3), 383–397. https://doi.org/https://doi.org/10.1111/j.1468-0084.1992.tb00008.x
Johansen, Søren, & Juselius, K. (1990). MAXIMUM LIKELIHOOD ESTIMATION AND INFERENCE ON COINTEGRATION — WITH APPLICATIONS TO THE DEMAND FOR MONEY. Oxford Bulletin of Economics and Statistics, 52(2), 169–210. https://doi.org/10.1111/J.1468-0084.1990.MP52002003.X
Katja, Hujo ; Nicola, P. (2010). South-South Migration. In Palgrave Macmillan. Palgrave Macmillan UK. https://doi.org/10.1057/9780230283374
Keita, S. (2016). Bilateral real exchange rates and migration. Applied Economics, 48(31), 2937–2951. https://doi.org/10.1080/00036846.2015.1133893
Kelley, A. C. (1965). International Migration and Economic Growth: Australia, 1865-1935. The Journal of Economic History, 25(3), 333–354. https://doi.org/10.1017/S0022050700057351
Kepli, S., Bani, Y., Rosland, A., & Laila, N. (2021). Non-Performing Loans and Macroeconomic Variables in Malaysia: Recent Evidence. International Journal of Economics and Management, 15(1), 19–31.
Khan, M. K., Teng, J. Z., & Khan, M. I. (2019). The effect of migrant remittances on economic growth: An ARDL approach. Engineering Economics, 30(4), 434–441. https://doi.org/10.5755/j01.ee.30.4.21830
Majumder, C. (2016). Relationship between Remittance and Economic Growth in Bangladesh: an Autoregressive Distributed Lag Model (ARDL). European Researcher, 104(3), 156–167. https://doi.org/10.13187/er.2016.104.156
Matsubayashi, Y. (2005). Are US current account deficits unsustainable? Testing for the private and government intertemporal budget constraints. Japan and the World Economy, 17(2), 223–237. https://doi.org/10.1016/j.japwor.2003.12.011
McCoskey, S. K., & Selden, T. M. (1998). Health care expenditures and GDP: Panel data unit root test results. Journal of Health Economics, 17(3), 369–376. https://doi.org/10.1016/S0167-6296(97)00040-4
Morley, B. (2006). Causality between economic growth and immigration: An ARDL bounds testing approach. Economics Letters, 90(1), 72–76. https://doi.org/10.1016/j.econlet.2005.07.008
Muhammad Faheem, Azali Mohamed, Fatima Farooq, & Sajid Ali. (2029). Do Migrant Remittances Spur Financial Development in Pakistan?evidence From Linear and Nonlinear ARDL Approach. Review of Economics and Development Studies, 5(4), 869–880. https://doi.org/10.26710/reads.v5i4.905
ÖZTÜRK, S., & ÖZDİL, S. (2020). Investigation of The Relationship Between Migration, Unemployment and Growth in the OECD Countries with Panel ARDL Technique. Yönetim ve Ekonomi: Celal Bayar Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 27(1), 159–168. https://doi.org/10.18657/yonveek.490073
Paul, B., & Uddin, G. S. (2011). Remittances and output in Bangladesh : An ARDL bounds testing approach to cointegration Remittances and output in Bangladesh : an ARDL. June. https://doi.org/10.1007/s12232-011-0120-2
Pesaran, M. H., & Shin, Y. (1997). An Autoregressive Distributed-Lag Modelling Approach to Cointegration Analysis. Symposium at the Centennial of Ragnar Frisch, The Norwegian Academy of Science and Letters, 1–24. https://doi.org/10.1017/ccol0521633230.011
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616
Phillips, P. C. B., & Perron, P. (1988). Testing for a Unit Root in Time Series Regression. Biometrika, 75(2), 335–346. https://doi.org/10.2307/2336182
Salt, J. (1992). The future of international labor migration. International Migration Review, 26(4), 1077–1111. https://doi.org/10.2307/2546876
Saltelli, A. (2002). Sensitivity analysis for importance assessment. Risk Analysis, 22(3), 579–590. https://doi.org/10.1111/0272-4332.00040
Shin, A. J. (2021). Exchange rates and immigration policy. Comparative Migration Studies, 9(1), 1–16. https://doi.org/10.1186/s40878-021-00228-2
Siddique, A., Selvanathan, E. A., & Selvanathan, S. (2012). Remittances and Economic Growth: Empirical Evidence from Bangladesh, India and Sri Lanka. Journal of Development Studies, 48(8), 1045–1062. https://doi.org/10.1080/00220388.2012.663904
Tipayalai, K. (2020). Impact of international labor migration on regional economic growth in Thailand. Journal of Economic Structures, 9(1), 1–19. https://doi.org/10.1186/s40008-020-00192-7
Toda, H. Y., & Yamamotob, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66(1–2), 225–250. https://doi.org/https://doi.org/10.1016/0304-4076(94)01616-8
Wang, Y., & Carlos, J. (2022). The role of demographics and migration for the future of economic growth in China ✩. European Economic Review, 144(February), 104076. https://doi.org/10.1016/j.euroecorev.2022.104076
Published
2024-12-05
How to Cite
RAHMAN, Md. Rifat et al.
Human Resource Indicators and Bank Performance.
Journal of Accounting, Business and Management (JABM), [S.l.], v. 31, n. 2, p. 85-97, dec. 2024.
ISSN 2622-2167.
Available at: <https://journal.stie-mce.ac.id/index.php/jabminternational/article/view/1141>. Date accessed: 22 jan. 2025.
doi: https://doi.org/10.31966/jabminternational.v31i2.1141.
Section
Articles
