Do Remittances Have a Real Impact on Economic Performance: Evidence from Côte d’Ivoire

Abstract

The paper investigated the impact of international remittances inflow on Côte d'Ivoire's economic performance using per capita gross domestic product (GDP) growth. Data ranging from 1975 to 2016 was used within an autoregressive distributed lag (ARDL) model framework. The aim is to establish whether there exist long-run dynamics between remittances, the country's per capita GDP and selected control variables. The empirical findings suggest a long-run relationship between remittances, remittances square, per capita GDP, investment, openness, education, and population size. Interestingly, the paper found that remittances do not significantly impact economic performance however, there exists a nonlinear relationship between remittances and growth. This invariably implies that there is a threshold beyond which, remittances will positively affect per capita growth. This tipping point stands at 1.068% of GDP. The overall implications of the findings are discussed.

Should countries' restrict remittances outflow? Evidence from Côte d'Ivoire

“…Our period of analysis ranged from 1975 to 2016. Following the work by Konan and N'Zué (2019), we use a conventional growth model augmented with a set of control variables. Thus, we have:…”

“…The relationship between remittance inflows and economic growth has been widely investigated by several researchers (Barajas et al, 2009;Chami et al, 2003Chami et al, , 2005Goschin, 2014;Konan & N'Zué, 2019;Kumar & Stauvermann, 2014;Lim & Simmons, 2015;Matuzeviciute & Butkus, 2016;Meyer & Shera, 2017). However, there are only few papers dedicated to the link between remittance outflows and macroeconomic factors (Al-Abri et al, 2018;Al Kaabi, 2016;Alkhathlan Khalid, 2013;Baas & Melzer, 2012;Bobeva, 2017;Edrees, 2016;Hathroubi & Aloui, 2016;Naufal & Genc, 2017;Razali et al, 2016;Termos et al, 2013;Vargas-Silva & Huang, 2006).…”