International Migrant Remittance and Productivity Growth in Ghana

Abstract

The study assessed the relationship between productivity growth and remittance at the macro level. Existing studies have largely focused on the micro level which falls short of revealing how shocks in the economy are transmitted through international remittance. Using time series analysis for data covering the period 1975-2013, the results from trend equation revealed that remittance inflows remained positive and increased modestly over time while economic growth as measured by the growth in labour productivity per person has been fluctuating. Regression results showed that remittance is significantly and negatively related to productivity in Ghana. The study revealed that foreign direct investment, official development assistance and international trade are positively related to productivity. It is recommended that government should make the business environment friendly so as to enhance foreign direct investment and boost trade as these have positive impact on productivity.

Remittances and agricultural productivity: the effect of heterogeneity in economic activity of farming households in Ghana

“…This school of thought was disputed though by Adams and Cuecuecha (2010), who showed, using the example of Guatemala, that most remittances received by Guatemalan households were invested rather than put into consumption. Ustarz and Issahaku (2017) tested the relationship between remittances and total factor productivity in Ghana and concluded that remittances had a negative effect on economic growth in Ghana. In addition, the net effect of outward migration outweighed the benefits of remittances.…”

International Remittances and Household Expenditure Patterns in Bangladesh

“…Hence, the long-run relationship between remittances, economic growth and poverty reduction in developing countries has been scrutinised in several macro-level studies. One group of researchers argue that remittances are utilised only in an unproductive manner or for consumption purposes (Ustarz & Issahaku, 2017). On the other hand, another group of researchers claimed that remittances are being used efficiently and contribute to their domestic economy through increased investments.…”