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The impact of remittances on economic growth in small-open developing economies

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  • Ahortor, Christian R.K.
  • Adenutsi, Deodat E.

Abstract

The essence of this study is to verify the macroeconomic implications of cross-border remittances for economic growth prospects of small-open developing economies for the period, 1996-2006. A set of dynamic panel model, specified within the framework of Blundell-Bond Generalized Method of Moment (GMM) was empirically analyzed. Using annual panel data from 31 small-open developing countries from Sub-Saharan Africa, Latin America and the Caribbean, this paper argues that, contemporaneously, remittances contribute significantly to economic growth in small-open developing economies. Remittances, however, contribute more to long-run economic growth in Latin America and the Caribbean than to Sub-Saharan Africa. In dynamic terms, remittances retard economic growth, but with overall positive impact across these regions.

Suggested Citation

  • Ahortor, Christian R.K. & Adenutsi, Deodat E., 2008. "The impact of remittances on economic growth in small-open developing economies," MPRA Paper 37109, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37109
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    Cited by:

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    2. Kassey P. Garba & Wasiu Adekunle & Oluwatosin Adeniyi, 2020. "Nexus between Foreign Remittances and Economic Growth in Nigeria: Role of the Financial Sector," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 7(1), pages 15-24.
    3. Iheke, Onwuchekwa Raphael & Nwaru, Jude Chukwudi & Onyenweaku, C. E., 2013. "The impact of Migrant Remittances on the Technical Efficiency of Arable Crop Farm Households in South Eastern Nigeria," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161263, African Association of Agricultural Economists (AAAE).
    4. Tchantchane, A. & Rodrigues, G. & Fortes, P.C., 2013. "An Empirical Study on the importance of Remittance and Educational Expenditure on Growth: Case of the Philippines," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 173-186.
    5. John Ssozi & Simplice A. Asongu, 2016. "The Effects of Remittances on Output per Worker in Sub-Saharan Africa: A Production Function Approach," South African Journal of Economics, Economic Society of South Africa, vol. 84(3), pages 400-421, September.
    6. Deodat E. Adenutsi, 2011. "Financial development, international migrant remittances and endogenous growth in Ghana," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 28(1), pages 68-89, March.
    7. Md. Nezum Uddin & Mohammed Jashim Uddin & Joynal Uddin & Monir Ahmmed, 2020. "Remittances and Economic Growth Tie in Selected South Asian Countries: A Panel Data Analysis," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(1), pages 197-205, January.
    8. World Bank, 2012. "Bangladesh - Towards Accelerated, Inclusive and Sustainable Growth : Opportunities and Challenges, Volume 2. Main Report," World Bank Publications - Reports 12121, The World Bank Group.
    9. Gloria Clarissa O. Dzeha, 2016. "The decipher, theory or empirics: a review of remittance studies," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 5(2), pages 113-134.
    10. Miguel à ngel Mendoza González & Marcos Valdivia López, 2016. "Remesas, crecimiento y convergencia regional en México: aproximación con un modelo panel-espacial," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 31(1), pages 125-167.
    11. Jawaid, Syed Tehseen & Raza, Syed Ali, 2012. "Remittances, Growth and Convergence: Evidence from Developed and Developing Countries," MPRA Paper 39002, University Library of Munich, Germany.

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    More about this item

    Keywords

    Remittances; Economic Growth; Panel Data; Latin America and Caribbean; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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