Abstract
<title>Abstract</title> <p> Remittances have become one of the most important external financial flows to developing economies, yet their contribution to economic development remains widely debated. This paper examines whether remittances influence GDP per capita directly and whether these effects extend across national borders in South and Southeast Asia. Using panel data for thirteen countries over 2006–2023, the analysis combines a Spatial Durbin Model (SDM) with group-wise fixed effects regressions based on remittance intensity. The spatial results reveal strong regional interdependence in GDP per capita but only weak and specification-sensitive remittance spillovers, indicating that remittance inflows do not constitute a robust channel through which income gains diffuse across neighbouring economies. In contrast, the group-wise analysis uncovers pronounced heterogeneity. Remittances exert significant non-linear positive effects in moderately remittance-dependent economies but become negative in highly dependent countries, while remaining insignificant where remittance dependence is low or moderate-high. Investment and trade emerge as more consistent drivers of regional income dynamics than remittance flows. These findings suggest that the developmental role of remittances depends primarily on domestic structural conditions rather than regional transmission effects, highlighting the need for country-specific remittance policies supported by stronger regional investment and trade integration. <italic> <bold>JEL Codes:</bold> </italic> <italic>C23, F24, O15, R12.</italic> </p>