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The impact of remittances on human development in developing countries: an empirical evidence from cross-sectionally dependent heterogeneous panel data with structural breaks

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  • Joseph Siani

    (IESEG School of Management)

Abstract

This paper applies second generation panel unit root, panel cointegration and panel vector error-correction Granger causality tests that allow for country specific heterogeneity, cross-country dependence and multiple structural breaks in a panel of 100 developing countries and shows that in the short-run, there is evidence of (i) a bidirectional causal relationship between economic growth and human development; (ii) a unidirectional causal relationship from remittances to human development and (iii) a bidirectional causal relationship between economic growth and remittances. Our results further suggest that in the long-run, both economic growth and remittances jointly Granger-cause human development and that it takes more than fourteen years for human development to converge to its long-run equilibrium in response to changes in economic growth and remittances. there is evidence of (i) a bidirectional causal relationship between economic growth and human development; (ii) a unidirectional causal relationship from remittances to human development and (iii) a bidirectional causal relationship between economic growth and remittances. Our results further suggest that in the long-run, both economic growth and remittances jointly Granger-cause human development and that it takes more than fourteen years for human development to converge to its long-run equilibrium in response to changes in economic growth and remittances.

Suggested Citation

  • Joseph Siani, 2022. "The impact of remittances on human development in developing countries: an empirical evidence from cross-sectionally dependent heterogeneous panel data with structural breaks," Economics Bulletin, AccessEcon, vol. 42(4), pages 2135-2149.
    • Handle: RePEc:ebl:ecbull:eb-22-00321
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    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • F2 - International Economics - - International Factor Movements and International Business

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