A panel data analysis of the growth effects of remittances

Rao, B. Bhaskara; Hassan, Gazi

doi:10.1016/j.econmod.2010.05.011

Cited by 123 publications

(83 citation statements)

References 33 publications

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“…Apart from that, the impact of remittance on direct economic growth is insignificant but may have small indirect growth effect (Rao & Hassan, 2011). However, Chami et al (2003) finds negative effect of remittance on overall economic growth because it diminishes the ability to work of the remittance recipient family's able persons.…”

Section: Brief Literature Reviewmentioning

confidence: 95%

Workers’ Remittance Inflow, Financial Development and Economic Growth: A Study on Bangladesh

Masuduzzaman¹

2014

IJEF

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The objective of this article is to analyze the role of remittance on economic growth and to investigate the interaction of remittance with the financed development of Bangladesh using annual data, relatively liberalized regime spanning from 1981 to 2013. This study employed the mostly used Johansen co-integration test along with vector error correction model to reveal both the short-run and the long-run association between remittance-growth and remittance-financed development. Granger Causality tests are also used to explore the possible endogenous relationship between remittance-growth and remittance-financed development. This study finds a long run positive relationship between inflow of remittance and gross domestic products (GDP) indicating that remittance will be more likely to contribute to longer-term growth in Bangladesh. It is also revealed that remittances have a significant positive effect on financial development. Therefore, this study posits that the inflow of workers' remittance matters for countries like Bangladesh, which has a relatively growing economy and a developing financial sector. The paper also discusses a number of policy issues arising from the results of the analysis in relation to remittance in association with managing migration and remittance, skilled development of the migrants, Dutch disease effect, returnee expatriates and gender issues. While examining the channels the direct impact of remittance on poverty reduction (household welfare) remains an area of research for the future. The outcome of this study will be a clear understanding of the key factors affecting workers' remittance, growth and financial development, which will be relevant to policy makers to have detailed appraisals of remittance polices and their expected economic impact on Bangladesh and other remittance recipients country as well.

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Section: Brief Literature Reviewmentioning

confidence: 95%

Workers’ Remittance Inflow, Financial Development and Economic Growth: A Study on Bangladesh

Masuduzzaman¹

2014

IJEF

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“…In a broader dimension Rao and Hassan (2009) investigates the indirect and direct effects of remittances on the growth rates for 40 developing countries. Their study analyses the strength of these effects using the standard incomplete panel data methods of OLS of both FE and RE combined with the Generalized Method of Moment (GMM).…”

Section: Introductionmentioning

confidence: 99%

Workers’ Remittance and Their Effect on the Level of Investment in Nigeria: An Empirical Analysis

Ojapinwa¹,

Odekunle²

2013

IJEF

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Despite the increasing importance of remittances in total international capital flows, the relationship between remittances and stock of capital formation has not been adequately studied. This paper studies one of the links between remittances and fixed capital formation, in particular how local financial sector development influences a country's capacity to take advantage of remittances. Using time series data for the period 1977-2010, the study employed the ADF and Philip-Perron modified unit root tests and based its analysis on a Dynamic Ordinary Least Squares-two-stage Instrumental Variable [2SIV] approach to control for the endogeneity problem that arises from utilization of lag independent variables. We find that remittances boost stock of physical investment in Nigeria countries with positive relationship with developed financial systems by providing complementarities to finance investment in a developed financial system. Substantial government allocation on social services is equally important in accelerating capital formation. The findings of this study strongly suggest that for Nigeria to benefit from international transfers, Nigeria financial sector should be fine-tuned to complement remittances potential capital formation.

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“…Sin embargo, es incierta la proporción de las remesas que se destina a la inversión así como su impacto sobre el acceso al crédito en las familias receptoras. A este respecto, Giuliano y Ruiz-Arranz (2009) encuentran que los efectos positivos de las remesas sobre el crecimiento económico son mayores en aquellos países con sectores financieros poco desarrollados y con restricciones de liquidez, ya que pueden constituirse como sistemas alternativos de financiación de inversiones (Rao y Hassan 2009). Fayissa y Nsiah (2010) llegan a la misma conclusión para 17 países de América Latina.…”

Section: Las Remesas Y El Crecimiento Económicounclassified

“…Finalmente, para la estimación se eligieron aquellos países de América Latina cuyas remesas superaron el 1% del PIB en algún momento del período considerado como proponen Rao y Hassan (2009 …”

Section: Análisis Empíricounclassified

El impacto de las remesas en el crecimiento económico de América Latina, 1975-2012

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2015

Am. Lat. Hoy. Rev. Cienc. Soc.

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BIBLID [1130-2887 (2015) 69, 141-161] Fecha de recepción: 6 de junio del 2013 Fecha de aceptación: 10 de enero del 2015 RESUMEN: La presente investigación analiza el efecto de las remesas en el crecimiento económico de los países de América Latina durante el período 1975-2012, controlando la posible endogeneidad de los regresores a través de estimadores GMM de sistema para modelos dinámicos de datos de panel. Los resultados muestran que no existe relación significativa entre remesas y crecimiento económico en la mayor parte de países de América Latina, aunque su efecto sí es significativo a partir de la crisis financiera internacional de 2008. Por otro lado, el mayor crecimiento de las remesas se produce en aquellos países con un menor nivel de renta per cápita a corto plazo, lo que estaría evidenciando su carácter contracíclico y lo limitado de sus efectos al estar destinadas principalmente hacia el consumo.Palabras clave: remesas; crecimiento económico; América Latina; GMM de sistema.ABSTRACT: The purpose of this paper is to analyze the impact of remittances on Latin American economic growth during the period 1975-2012, focusing on the potential endogeneity of the regressors through the GMM system estimators for dynamic data panel models. The results show that there is only a weak correlation between remittances and economic growth in most Latin American countries. This effect has been, however, positive and significant since the international financial crisis of 2008. On the other hand, the highest remittance growth occurs in countries with

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A panel data analysis of the growth effects of remittances

Cited by 123 publications

References 33 publications

Workers’ Remittance Inflow, Financial Development and Economic Growth: A Study on Bangladesh

Workers’ Remittance Inflow, Financial Development and Economic Growth: A Study on Bangladesh

Workers’ Remittance and Their Effect on the Level of Investment in Nigeria: An Empirical Analysis

El impacto de las remesas en el crecimiento económico de América Latina, 1975-2012

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