Remittances and GDP Dynamics in 11 Developing Countries: Evidence from Panel Cointegration and PMG Techniques
Despite a plethora of research, the role of remittances on economic growth is yet to be understood. Is there any long run relationship between remittances and GDP? This paper contributes to the literature by answering this question for 11 top remittance-recipient developing countries. These countries are: Bangladesh, Dominican Republic, El Salvador, Gambia, Guatemala, Honduras, Jamaica, Lesotho, Philippines, Senegal and Sri Lanka. Using recently developed econometric techniques, i.e., panel cointegration and pooled mean group (PMG) approach; our results support a positive long run relationship between remittances and GDP. However, the magnitude of the remittance-GDP coefficient is rather quite small. We hypothesize that remittances may be used to increase consumption in these economies. Our results also imply that developing countries should formulate policies to divert this external resource into more productive sectors.
Volume (Year): 14 (2011)
Issue (Month): 42 (December)
|Contact details of provider:|| Postal: 6 ROMANA PLACE, 70167 - BUCHAREST|
Web page: http://www.rei.ase.ro/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Aysit Tansel & Pinar Yasar, 2010.
"Macroeconomic impact of remittances on output growth: Evidence from Turkey,"
Transnational Press London, UK, vol. 7(2), pages 132-143, October.
- Tansel, Aysit & Yaşar, Pınar, 2010. "Macroeconomic Impact of Remittances on Output Growth: Evidence from Turkey," IZA Discussion Papers 5376, Institute for the Study of Labor (IZA).
- Aysit Tansel & Pinar Yasar, 2010. "Macroeconomic Impact of Remittances on Output Growth: Evidence from Turkey," ERC Working Papers 1002, ERC - Economic Research Center, Middle East Technical University, revised Jun 2010.
- Aysit Tansel & Pinar Yasar, 2010. "Macroeconomic Impact of Remittances on Output Growth: Evidence From Turkey," Working Papers 2010/12, Turkish Economic Association.
- Aysit Tansel & Pinar Yasar, 2011. "Macroeconomic Impact of Remittances on Output Growth: Evidence from Turkey," Working Papers 586, Economic Research Forum, revised 05 Jan 2011.
- John Page & Sonia Plaza, 2006. "Migration Remittances and Development: A Review of Global Evidence," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 245-336, December.
- Bassanini, Andrea & Scarpetta, Stefano, 2002. "Does human capital matter for growth in OECD countries? A pooled mean-group approach," Economics Letters, Elsevier, vol. 74(3), pages 399-405, February.
- Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
- Samir Jahjah & Ralph Chami & Connel Fullenkamp, 2003. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Working Papers 03/189, International Monetary Fund.
- Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
- Marta Ruiz-Arranz & Paola Giuliano, 2005. "Remittances, Financial Development, and Growth," IMF Working Papers 05/234, International Monetary Fund.
- Giuliano, Paola & Ruiz-Arranz, Marta, 2006. "Remittances, Financial Development, and Growth," IZA Discussion Papers 2160, Institute for the Study of Labor (IZA).
- Ziesemer Thomas H.W., 2009. "Worker Remittances and Growth: The Physical and Human Capital Channels," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(6), pages 743-773, December.
- Ziesemer, Thomas, 2006. "Worker Remittances and Growth: The Physical and Human Capital Channels," MERIT Working Papers 020, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
- Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
- Tom Doan, "undated". "IPSHIN: RATS procedure to implement Im, Pesaran and Shin panel unit root test," Statistical Software Components RTS00098, Boston College Department of Economics.
- Asteriou, Dimitrios, 2009. "Foreign aid and economic growth: New evidence from a panel data approach for five South Asian countries," Journal of Policy Modeling, Elsevier, vol. 31(1), pages 155-161.
- Catrinescu, Natalia & Leon-Ledesma, Miguel & Piracha, Matloob & Quillin, Bryce, 2009. "Remittances, Institutions, and Economic Growth," World Development, Elsevier, vol. 37(1), pages 81-92, January.
- Catrinescu, Natalia & Leon-Ledesma, Miguel & Piracha, Matloob & Quillin, Bryce, 2006. "Remittances, Institutions and Economic Growth," IZA Discussion Papers 2139, Institute for the Study of Labor (IZA).
- Biru Paul & Md. Uddin & Abdullah Noman, 2011. "Remittances and output in Bangladesh: an ARDL bounds testing approach to cointegration," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(2), pages 229-242, June. Full references (including those not matched with items on IDEAS)