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Remittance and growth nexus: bootstrap panel granger-causality evidence from high remittance receiving countries

Author

Listed:
  • Hamisu Sadi Ali
  • Siong Hook Law
  • Zulkornain Yusop
  • Veton Zeqiraj
  • Yusuf Ibrahim Kofarmata
  • Fatima Muhammad Abdulkarim

Abstract

The present paper examine the causal relationship between economic growth and remittances among the top ten highest remittance recipient countries in the world based on remittance to GDP ratio (Haiti, Honduras, Kyrgyz Republic, Lebanon, Lesotho, Moldova, Nepal, Samoa, Tajikistan, and Tonga). We applied Konya (2006) Bootstrap panel Granger-causality test technique for the period of 1998-2014. The result shows that, for countries like Honduras, Kyrgyz Republic, Lebanon, and Moldova, inflow of remittances causes economic growth, while economic growth causes remittance inflows in the case of Lesotho, Nepal, Samoa, and Tajikistan. However, bidirectional causality exists in the case of Haiti whereby remittances cause economic growth and vice-versa. Hence, the results reveal that, the causality between the two variables is both one way causality that run from remittances to growth and the other segment that run from economic growth to remittances, therefore the result is mainly country specific.

Suggested Citation

  • Hamisu Sadi Ali & Siong Hook Law & Zulkornain Yusop & Veton Zeqiraj & Yusuf Ibrahim Kofarmata & Fatima Muhammad Abdulkarim, 2018. "Remittance and growth nexus: bootstrap panel granger-causality evidence from high remittance receiving countries," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 15(3), pages 312-324.
    • Handle: RePEc:ids:ijecbr:v:15:y:2018:i:3:p:312-324
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    Citations

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    Cited by:

    1. Joseph Siani, 2020. "International remittances, poverty and growth into WAEMU countries: evidence from panel cointegration approach," Economics Bulletin, AccessEcon, vol. 40(2), pages 1446-1456.
    2. Mirzosaid Sultonov, 2020. "The causality relationship between remittances and the real effective exchange rate: the case of the Kyrgyz Republic," International Journal of Economic Policy Studies, Springer, vol. 14(1), pages 167-177, February.

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