Analyzing the Asymmetrical Relationship between Migration, Remittance, Financial Development, and Economic Growth in India: Evidence from NARDL Analysis

Author Name

Imran Khan


Migration, Remittance, Economic Growth


The relationship between remittances and migration is significant and has gained considerable attention in empirical research. This research aims to examine the asymmetrical relation between migration, remittances, economic growth and financial development in India from 1990 to 2020. The study is based on time series data and has developed a non-linear ARDL model based on theoretical linkage. The reason for selecting the NARDL model was its ability to incorporate the possibility of asymmetric effects of positive and negative changes in explanatory variables on the dependent variable, unlike the case of ARDL, wherein the possible impact of explanatory variables remains the same. The study confirmed the existence of long-term co-integration between the variables. Also, it shows that a positive shock in remittances causes an increase in migration from the country, while a negative shock hampers it. However, the positive shocks in remittance were found to have a more significant impact on migration than negative shocks. This result also supported by the conclusion of the dynamic multiplier analysis. Moreover, the study also found that financial development has a negative impact on migration, but it is statistically insignificant. Lastly, the economic growth coefficient indicated a positive and significant impact of economic growth on migration, confirming that economic growth leads to an increase in migration. Empirical results also support the existence of an asymmetric long-run relationship among the variables. As a result, it is recommended that the relevant economic, monetary, and public policymakers may use remittance inflows as a tool in developing policies to enhance and control migration activity from the country. It is also proposed that effective remittance channelization should be adopted without jeopardizing economic growth.


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