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Remittances And Economic Growth In South Africa: Applying Ardl Bounds Testing Analysis In The Presence Of Structural Breaks

Author

Listed:
  • Mduduzi Biyase

    (College of Business and Economics, University of Johannesburg)

  • Mathias Manguzvane

    (College of Business and Economics, University of Johannesburg)

  • Thomas Udiman

    (Southwest Forestry University)

Abstract

We take another look at the relationship between remittances and economic growth in South Africa, using recent data and a fairly lengthy time period of approximately 50 years for South Africa running from 1970 to 2019. We use the autoregressive distributed lag (ARDL) bounds testing approach to assess the cointegration among remittances, economic growth, including control variables in the presence of structural breaks. We find evidence to suggest that the structural change in economic growth occurred in 2008 during the global financial crisis, while the break point for remittances received emerged in 1997. After taking into consideration the presence of structural breaks, our study confirmed a cointegration relationship between remittances received and economic growth in South Africa. Specifically, the ARDL results present a negative and significant estimates of remittances on economic growth in the short and long-run, consistent with previous studies. All the specification tests confirm the statistical robustness of the ARDL bounds testing method.

Suggested Citation

  • Mduduzi Biyase & Mathias Manguzvane & Thomas Udiman, 2022. "Remittances And Economic Growth In South Africa: Applying Ardl Bounds Testing Analysis In The Presence Of Structural Breaks," Economics Working Papers edwrg-07-2022, College of Business and Economics, University of Johannesburg, South Africa, revised 2022.
    • Handle: RePEc:ady:wpaper:edwrg-07-2022
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    ARDL; economic growth; remittances; WDI;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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